Clearwater International advises Character World on €46m secondary buyout


Clearwater International has advised Character World, a licensed bedding specialist, on a €46m secondary management buyout backed by private equity house Palatine Private Equity.

Founded in 1998, Cheadle-based Character World provides licensed bedding and homeware-related products to age groups ranging from pre-school children to students. The firm works with some of the world’s most iconic gaming, character and music entertainment companies. The family-run business acquires the UK product licensing rights for a comprehensive range of brands owned by Disney, Marvel, Lucasfilm, Lego, Nickelodeon, Hasbro, Mattel and Warner Brothers.

Having recently secured international licencing rights in Europe for a number of these respected brands, Character World is on track to reach sales of over €40m to December 2014 and currently employs 74 UK staff. Brothers Mark and Danny Schweiger will now look further afield to meet the increased demand from many of the European-based retailers.

Palatine Private Equity has invested in the deal with bank funding from RBS. The buyout will see Palatine partner Andy Lees and Palatine investment manager James Winterbottom join the board of the company as non-executive directors. The deal provides a successful exit for RJD Partners, who generated a 2.9x return on their original investment which was a management buyout with the Schweigers back in 2008.

This deal marks one of several transactions that Clearwater International have advised on in the consumer market in 2014. Deals completed include Kitchen Craft’s sale to US-based Lifetime Brands, Pure Leisure Group (PLG) securing a €24m funding line from Grovepoint Capital via its specialty lending arm, and Business Growth Fund’s investment into fitness company Gymbox. These transactions highlight Clearwater International’s expertise in the consumer market.

A team at Clearwater International led by CEO Michael Reeves and partner Gareth Iley, with support from associate director Rob Burden and associate Aidan Miller, advised the shareholders of Character World on its secondary management buyout.

Gareth Iley, head of Consumer at Clearwater International, said: “The transaction provides a successful exit for RJD and provides the management team with a new partner for the next phase of its growth strategy.

Since RJD invested six years ago, Character World has cemented its position as the clear leader in the UK licensed textiles market and significantly increased its retail customer base. With the business increasingly focused on Europe, Character World is facing exciting opportunities and significant growth potential. It is another example of an outstanding management team leading a UK consumer business to be a success internationally.”