BC to triple its money following Foxtons float

Foxtons' successful IPO this morning - it priced at the top of its range, valuing the company at nearly £650m - means BC Partners is now sitting on a 3x return from the business

Foxtons enjoyed a successful debut on the London Stock Exchange today: the London-focused UK estate agent, which was bought by UK-based BC Partners at the height of the boom, sold 169.4m shares at 230 pence each, giving the company a market capitalisation of about £649m.

In a pre-trading statement, Foxtons said this would generate proceeds of approximately £390 million “comprising a primary component of £55 million and secondary sales of £335 million”. The latter included a “partial sell-down” by BC Partners, and by various employees of the company. 

The shares subsequently opened up a further 19 percent when trading began. At press time, they were changing hands for 280p per share, up 22 percent, valuing the company at almost £790 million.

The strong debut will be welcome news for BC Partners, which bought Foxtons for £375 million in 2007 just weeks before the collapse of the London housing market collapsed. BC’s remaining stake in Foxtons will be of 22 percent, assuming full exercise of over-allotment option, or 28 percent if not.

The firm invested from its €5.8 billion BC European Capital VIII, a 2005 vintage. Foxtons was restructured in 2010, with BC Partners injecting fresh equity but losing its majority stake. The firm regained control of the company in 2012 when it repurchased the equity stakes from Foxton’s lenders. 

Back in 2009, Andrew Newington, a former managing partner at BC, told reporters: “Obviously, we made the wrong call on the market.”

However, performance has turned round to such an extent that after today's IPO, BC Partners has now made a return of three times its total investment in the business, according to an LP source familiar with the deal. That includes the proceeds from today's stake sale, and the value of its unrealised stake in the business, which remains “in the double digits”, the source said.