South: International investors attracted to UK mid-sized companies, says Dunedin

International investors are viewing UK businesses as an increasingly attractive investment proposition, according to mid-market private equity house Dunedin. Dunedin has seen a threefold increase in the number of international investors that have made commitments to its latest buyout fund. 

Against a backdrop of limited funding available for UK businesses, Dunedin announced that is has successfully raised a £300 million fund, dedicated to investing in UK mid-sized companies with an enterprise value of between £20m and £75m. Dunedin is actively targeting investment in London and the South and counts four local businesses in its current portfolio, employing over 1,200 people. Dunedin-backed Formaplex, based in Portsmouth, recently ranked 45 in the Sunday Times HSBC International Track 200.

A total of 60% of the investors that have committed to Dunedin’s third fund reside outside the UK, a threefold increase from the 20% that made commitments to its predecessor fund. Investors from the Nordics and the USA have invested in Dunedin for the first time, with increased investor interest seen in France, Switzerland and Germany.

In July 2011 Dunedin backed the £44 million buyout of Red Commerce, a global supplier of SAP experts to international corporations and consultancies, whose head office is in London. Dunedin’s backing has enabled the business to achieve its growth ambitions and since the buyout, Red Commerce has opened three international offices in Brazil, Munich and New York. Dunedin also backed CitySprint, the UK’s leading independent same day distrbution network company, in 2010. Dunedin has helped the business to complete nine acquisitions growing its revenues from £61 mililon to £100 million. The business is also based in London and employs 539 people.

Another of Dunedin’s investments in the South, Portsmouth based engineering company Formaplex, which specialises in carbon composites, pattern moulding and tooling, was ranked as one of Britain’s private companies with the fastest growing overseas sales in The Sunday Times HSBC International Track 200. Dunedin backed Formaplex in January 2008, since which time the business has grown threefold, increasing its turnover from £7m to £33m and its employee base from 40 to 200 in just five years.

Giles Derry, partner at Dunedin, commented: “As a result of our successful fund close, a further £300 million will be available for investment in UK SMEs - and as much as £60 million for enterprises in London and the South.

“We provide access to high quality UK SMEs and their growth potential; and the fact that our fund exceeded our £250m target is an endorsement both of the strength of opportunity available in the UK, and of the active approach that we take to creating stronger, more profitable enterprises.

“One of the key ways that we add value to the companies that we back is to help them internationalise, and our investments based in London and the South exemplify this. It is something we expect to do more of as we now work to deploy our third fund, giving nationally successful businesses a chance to shine on the international stage.”