Consumer sector comment – February 2012

Dato

At our recent consumer networking event, well attended by business owners from a wide range of consumer businesses, we presented some interesting M&A statistics and trends summarising activity in the sector in 2011.

Of the mid-market deals involving a UK target and with disclosed data:

  • 45% of deals were cross-border
  • 58% involved a trade buyer
  • 18% of the deals related to Ecommerce businesses
  • Average EBITDA multiple achieved was 10.8x

Clearly these are the headlines, with variations of values depending on type of business, Ecommerce ones generating the highest EBITDA multiples with star transactions such as the sale of Kiddicare to Morrison’s definitely helping to drive up the average.

Although private equity transactions still featured strongly in 2011, for example Bridgepoint Capital’s significant investment in sports ecommerce retailer Wiggle, the trend for last year was definitely a shift to more trade deals. Increasingly overseas trade buyers were looking to expand their portfolios of brands and geographical reach – sometimes seeing the UK as a way of establishing a strong foothold in Europe.

Looking forward, the message for 2012 was that, although there will continue to be tough times ahead and downward pressures on consumer spend, we still see robust M&A volumes and opportunities across the sector as a whole.

To view the presentation please visit the consumer home page.

Deals

Edinburgh Woollen Mill Ltd has agreed to acquire The Peacock Group Plc for an undisclosed consideration from the administrators. Under the terms of agreement, Edinburgh Woollen Mill has acquired 338 Stores, 49 Concessions and 3 Distribution centres of The Peacock Group. The Peacock Group had 611 stores and 49 concessions across Britain and an employee base of 9,100 people before it went into administration last month with its Bon Marche chain sold to Sun European Capital. Barclays and Santander banks will provide funding to Edinburgh Woollen Mill for the acquisition.

Inflexion Private Equity Partners has acquired Natural Products Ltd, the UK based manufacturer and distributer of gifts, stationery, and personal care products, for an undisclosed consideration. The transaction will enable Natural Products to develop the business both in the UK and internationally as well as to further develop product design and range.

SecretSales Ltd, a London, UK-based private online shopping club operator, has raised £6.3 million in funding by a syndicate of investors led by Doughty Hanson Technology Ventures, Pentech Ventures and OCP Innovation (managed by Partech International Partners) and including Connect Ventures, Leoni Sceti Group, and management.

Poundstretcher Ltd has acquired UGO Stores Ltd, the UK-based discount store operator, for an undisclosed consideration from the administrators in a pre-packed deal which sees 245 saved. Financial details were not disclosed.

Ideal Shopping Direct Ltd, a portfolio company of Inflexion Private Equity Partners, has acquired Createtoday.com, an online portal which enables customers to create personal designs for greeting cards, postcards or wall art. The consideration was not disclosed.

Rowland’s Clothing Ltd, the UK-based women’s clothing retailer has been sold out of administration to Rosemex Trading Ltd, for an undisclosed consideration. Rosemex is a consortium led by New World Private Equity and Mr Stewart Cantly, the new chairman. All of the 72 staff has transferred to Rosemex. Financial details were not disclosed.

Acorn Media Group Inc., the US based company engaged in distributing and marketing home video products and other merchandise has acquired a 64% stake in Agatha Christie Ltd, the UK based company holding the copyrights to all Agatha Christie works, from Chorion Limited. The value of the deal was not disclosed. The acquisition will enable Acorn to make further development and enhance its television production business with it gaining control of more than 80 novels and short story collections, 19 plays, a film library of 40 TV films, and characters such as Hercule Poirot and Miss Marple. Post acquisition the Agatha Christie family will retain the remaining 36% stake in Agatha Christie Limited.