The private equity owner of Asda has struck a deal to buy a controlling stake in a group which specialises in backing British SMEs.

Sky News has learnt that TDR Capital has agreed to acquire a majority interest in CorpAcq, less than six months after the so-called ‘corporate compounder’ aborted a deal to list in the US.

City sources said this weekend that CorpAcq, which makes roughly £125m in annual profit, was being valued at well over £1bn on an enterprise value basis in the deal with TDR.

Founded in 2006, CorpAcq – which sponsors Sale FC Rugby’s stadium, near its Altrincham base – has amassed a portfolio of more than 40 companies.

It specialises in buy-and-build strategies, with a focus on companies operating in the industrial products and services sectors.

The company’s acquisition blueprint enables SME founders to retain management control while gaining a long-term investment partner offering operational support to those businesses.

CorpAcq’s founder is Simon Orange, brother of the former Take That member Jason and joint-owner of the Sale Sharks.

In 2023, a special purpose acquisition company (SPAC) founded by Michael Klein, one of Wall Street’s leading financiers, announced a $1.5bn plan to take CorpAcq public.

The merger was called off in August last year, with Mr Klein’s vehicle Churchill Capital VII citing difficult IPO market conditions.

Banking sources said that TDR and CorpAcq had entered discussions well after the SPAC deal was abandoned.

The deal, which could be announced within weeks, is the latest to be struck by TDR, which also counts the pubs giant Stonegate and David Lloyd Leisure among its portfolio of investments.

A spokesman for TDR declined to comment.

The owner of Poundland, one of Britain’s biggest discount retailers, has drafted in City advisers to explore radical options for arresting the growing crisis at the chain.

Sky News has learnt that Pepco Group, which has owned Poundland since 2016, has hired consultants from AlixPartners to address a sales slump which has raised questions over its future ownership.

City sources said this weekend that the crisis would prompt Pepco to explore more fundamental for Poundland, including a formal restructuring process that could prompt significant store closures, or even an attempt to sell the business.

AlixPartners is understood to have been formally engaged last week, with options including a company voluntary arrangement or restructuring plan said to have been floated by a range of advisers on a highly preliminary basis.

Sources close to the group said no decisions had been taken, and that the immediate focus was on improving Poundland’s cash performance and reviving the chain’s customer proposition.

A sale process was not under way, they added.

Poundland trades from 825 stores across the UK, competing with the likes of Home Bargains, B&M and Poundstretcher, as well as Britain’s major supermarket chains.

Last year, the British discounter recorded roughly €2bn of sales.

It employs roughly 18,000 people.

Earlier this week, Pepco Group, the Warsaw-listed retail giant which also trades as Pepco and Dealz in Europe, said Poundland had seen a like-for-like sales slump of 7.3% during the Christmas trading period.

In its trading statement, Pepco said that Poundland had suffered “a more difficult sales environment and consumer backdrop in the UK, alongside margin pressure and an increasingly higher operating cost environment”.

“We expect that the toughest comparative quarter for Poundland is now behind us – the same quarter last year represented a period prior to the changes made within our clothing and GM [general merchandise] ranges – and therefore, we expect the negative sales performance for Poundland to moderate as we move through the year.”

It added that Poundland would not increase the size of its store portfolio on a net basis during the course of this year.

“We are continuing a comprehensive assessment of Poundland to recover trading and get the business back to its core strengths, including undertaking a thorough assessment of all costs across the business, as well as evaluating its overall competitive positioning,” it added.

The appointment of AlixPartners came several weeks after Stephan Borchert, the Pepco Group chief executive, said he would consider “every strategic option” for reviving Poundland’s performance.

He is expected to set out formal plans for the future of Poundland, along with the rest of the group, at a capital markets day in Poland on 6 March.

Among the measures the company has already taken to halt the chain’s declining performance have been to increase the range of FMCG and general merchandise products sold at its traditional £1 price-point.

Poundland’s crisis contrasts with the health of the rest of the group, with Pepco and Dealz both showing strong sales growth.

A spokesman for Pepco Group, which has a market capitalisation equivalent to about £1.7bn, declined to comment further on the appointment of advisers

AlixPartners also declined to comment.

The UK’s benchmark stock index has reached another record high.

The FTSE 100 index of most valuable companies on the London Stock Exchange closed at 8,505.69, breaking the record set last May.

It had already broken its intraday high at 8532.58 on Friday afternoon, meaning it reached a high not seen before during trading hours.

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The weakened pound has boosted many of the 100 companies forming the top-flight index.

Why is this happening?

Most are not based in the UK, so a less valuable pound means their sterling-priced shares are cheaper to buy for people using other currencies, typically US dollars.

This makes the shares better value, prompting more to be bought. This greater demand has brought up the prices and the FTSE 100.

The pound has been hovering below $1.22 for much of Friday. It’s steadily fallen from being worth $1.34 in late September.

Also spurring the new record are market expectations for more interest rate cuts in 2025, something which would make borrowing cheaper and likely kickstart spending.

What is the FTSE 100?

The index is made up of many mining and international oil and gas companies, as well as household name UK banks and supermarkets.

Familiar to a UK audience are lenders such as Barclays, Natwest, HSBC and Lloyds and supermarket chains Tesco, Marks & Spencer and Sainsbury’s.

Other well-known names include Rolls-Royce, Unilever, easyJet, BT Group and Next.

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FTSE stands for Financial Times Stock Exchange.

If a company’s share price drops significantly it can slip outside of the FTSE 100 and into the larger and more UK-based FTSE 250 index.

The inverse works for the FTSE 250 companies, the 101st to 250th most valuable firms on the London Stock Exchange. If their share price rises significantly they could move into the FTSE 100.

A good close for markets

It’s a good end of the week for markets, entirely reversing the rise in borrowing costs that plagued Chancellor Rachel Reeves for the past ten days.

Fears of long-lasting high borrowing costs drove speculation she would have to cut spending to meet self-imposed fiscal rules to balance the budget and bring down debt by 2030.

Long-term government borrowing had reached a high not seen since 1998 while the benchmark 10-year cost of government borrowing, as measured by 10-year gilt yields, was at levels last seen around the 2008 financial crisis.

The gilt yield is effectively the interest rate investors demand to lend money to the UK government.

Only the pound has yet to recover the losses incurred during the market turbulence. Without that dropped price, however, the FTSE 100 record may not have happened.

Also acting to reduce sterling value is the chance of more interest rates. Currencies tend to weaken when interest rates are cut.