Consumer sector comment – September 2011

Dato

August saw another deal completed in the online promotions market place with the acquisition of Vouchercodes.co.uk by Whale Shark Media – a deal reportedly completed at nearly 2.7 times turnover. Vouchercodes was founded in 2004 and has grown to be one of the leaders in the voucher code market. The use of specific deals and vouchers provided from websites such as Vouchercodes is now a well established consumer trend.

The larger players in the market, such as Whale Shark and Groupon have already made acquisitions. It is not just the voucher and daily offer sites that have interested acquirers and funders. Last year we advised Asperity, a leading provider of integrated and flexible employee benefits, on its sale to Inflexion Private Equity. A major aspect of Asperity’s business model is the vouchers and discounts that it is able to offer the employees of its customers. Today’s retailer is embracing these offers to attract customers and footfall and at the same time manage its margin carefully. The voucher code market is one where we expect to see further consolidation.

Deals

WhaleShark Media, an online coupon and deal sites operator headquartered in the US, has acquired eConversions, the UK-based operator of the websites VoucherCodes.co.uk in the UK and Gutschein-Codes.de in Germany, for $40 million. Under WhaleShark Media, VoucherCodes.co.uk and Gutschein-Codes.de will remain independent brands. This deal is WhaleShark Media’s sixth acquisition since its inception in November 2009, the most recent being RetailMeNot.com in November 2010. With the addition of eConversions, WhaleShark Media’s websites will attract an estimated 150 million unique visitors in 2011.

CVC Capital Partners Ltd, the UK based private equity firm, has acquired a 51% stake in Virgin Active Group Ltd, the UK based operator of health clubs, from Virgin Group Limited, Bridgepoint Capital Limited and Permira, in a transaction with an estimated enterprise value of £900 million. The acquisition will enable Virgin Active to expand its operations. The deal is subject to regulatory approval and is expected to close in the fourth quarter of 2011.

Van de Velde, a lingerie manufacturer based in Belgium, has acquired an 87% stake in Rigby & Peller (R&P), a UK-based lingerie manufacturer and retail chain, for £8 million. Van de Velde intends to reinforce the R&P brand and grow the business both in the UK and abroad.

The management of Bagel Nash Ltd, the UK based specialist bakery retailer, has acquired the company in a management buyout transaction backed by YFM Private Equity Limited, the UK based private equity firm, for £5 million. The investment will support the acquisition of Bagel Nash and provide capital to finance its plans to open up new outlets in the North, North-West and the Midlands and will further aid the growth of wholesale and export trade.

Symington’s, a manufacturer of dried foods based in the UK, has acquired the sauce brands Ragu and Chicken Tonight in the UK and Ireland from Unilever for an undisclosed value.

Garden Centre Group (formerly Wyevale), a garden centre company based in the UK, has acquired the operating business of rival garden supplies retailer Country Homes and Gardens, for an undisclosed value. The chain will now operate under the group’s umbrella of brands, which includes Wyevale, Blooms and Country Gardens, taking the group’s portfolio to 131 centres.

Charles Wells Ltd, the UK-based holding company of the Charles Wells Pub Company’s pub chain, has acquired the remaining 40% stake in Wells & Young’s Brewing Company, a supplier of specialty beers based in the UK from Young & Co.’s Plc for £15 million, making Wells & Young’s a wholly owned subsidiary of Charles Wells Ltd.

The management of G&J Greenalls, the UK based gin distiller, has acquired the company for £7.5 million, in a management buyout transaction along with external management, from De Vere Group Plc, the UK-based owner and operator of luxury hotels.

Directors at the UK furniture chain Lombok, along with existing investor Angora, have acquired Lombok in a pre-pack administration deal

Carmen Busquets, a private investor in luxury goods from Venezuela, has acquired a stake in Lookk, the UK-based social networking clothes design company, for an undisclosed value. Carmen Busquets founded Garmz.com in 2008 and it will be re-launched under the name Lookk, with venture capital group, Eden Ventures as its primary investor. Other backers include Kima Ventures, David McClure, the Silicon Valley investor, and angel investor Sherry Couto.

LoveLula, an online retailer of organic and natural beauty brands founded in the UK, and Zuneta, the UK based online beauty retailer for Luxury brands, have merged and will receive a growth equity investment from Forward Venture Partners. With the added investment from Forward Venture Partners the new company will expand its operations across Europe, continue to invest in customer service and work with new brands looking for an online partner.