Health and wellbeing is an area of increasing consumer expenditure and as a result trade buyers and private equity houses are very active, seeking out high quality businesses to invest in.
Clearwater International’s Consumer team completed another transaction this month, advising UK boutique gym chain, Gymbox. The deal, which sees the Business Growth Fund invest €12.6 million, will provide capital for Gymbox to continue site roll-out across London and, in due course, other UK cities. Private equity investors remain active in the sector, for example:
- Xercise4less, a UK gym group, was backed by the Business Growth Fund in August 2013;
- Viva Gym, a UK / Spanish gym chain, is backed by UK PE fund Magenta;
- Three Scandinavia gym chains merged in June 2013, when SATS, Elixia and Fresh Fitness were bought together by a number of private equity groups; and
- In January 2014, two low-cost UK gym chains (The Gym Group and Pure Gym) that were both on their second PE investor announced a merger. However, these plans have recently been abandoned on the back of the decision by the UK Competition and Markets Authority to undertake an in-depth investigation into the deal.
Global transaction activity in the health, sport, fitness and outdoor markets remains buoyant. Recent deals include:
- Global luggage brand Samsonite made its third acquisition of the year in June, acquiring Gregory Mountain Products – a technical backpack brand – from Black Diamond for US$85 million. Tom Korbas, President (Americas) for Samsonite, commented: “There’s a growing trend towards living healthier, more active lives and the number of consumers participating in outdoor activities has been increasing steadily as a result.”
- UK cycle and car accessories retailer Halfords acquired the high end Boardman Bikes brand. In 2013, cycling represented 25.3% of group revenues. Halfords describes the cycling market as “buoyant”. Cycling continues to be a growth sport in many international territories, with both brands and retailers attracting private equity investment and global strategic trade buyers.
- GoPro, maker of wearable action cameras used by sporting enthusiasts such as surfers, cyclists, skydivers and skiers, completed their IPO which valued the business at $3bn. GoPro was founded in 2004 by Nick Woodman, who came up with the concept while on a surfing trip to Australia. The success of GroPro reflects the value of category dominance – GroPro’s share of the action camera market is estimated at 90%.
- Arguably, in a slightly different area of health, the ongoing consolidation of the electronic cigarette market continuesd apace in June with Philip Morris acquiring Nicocigs, Japan Tobacco acquiring E-lites and Victory Electronic acquiring Ten Motives – their third acquisition in Europe this year.
As consumers globally look to lead healthy lifestyles, maintain their health and live longer, private equity funds and strategic trade buyers will continue to be active in the sector. Clearwater International sees many more opportunities for deals in the coming months.
Homair Vacances SA, the listed French provider of outdoor holiday accommodation, has agreed to acquire Eurocamp Ltd, the UK-based provider of outdoor holiday accommodation, from Holidaybreak Plc. Homair will pay €112.8m in consideration for the acquisition. Of the total consideration, €108.1m will be paid in cash on completion and €4.7m as a deferred consideration relating to tax refund. The combined entity will manage a total of 15,000 mobile-homes, located at 300 campsites. Eurocamp reported EBITDA of €20.2m in 2013 and operates 200 camping parks across Europe.
TDR Capital has won an auction to acquire IMO Car Wash Group Ltd, the UK provider of car washing services, from HBOS. IMO operates 834 car washes.
Rutland Partners LLP, the PE firm, has acquired Maplin Electronics Ltd, a consumer electronics retailer, from Montagu Private Equity LLP for a consideration of €107.5m. Rutland intends to improve the business and its performance, and help management deliver a broad-based strategic plan aimed at releasing its further potential. Maplin generates a revenue of over €275m with an increasing EBITDA and it has repaid all its debt and mezzanine facilities in full. This is the first investment from Rutland Fund III. Montagu acquired Maplin in 2004 for a consideration of €283.3m.
Bestseller A/S, a Danish clothing and accessories company, has agreed to acquire M and M Direct Ltd, the UK-based retailer company of discounted lifestyle, sports apparel, fashion and footwear, from TA Associates Management, the US private equity firm, for a consideration of €177m. The transaction remains subject to standard regulatory clearance and is expected to be completed within eight weeks.
Vitruvian Partners LLP, a UK-based PE firm, and the management of JacTravel Ltd, a UK-based provider of online hotel bookings and travel services, have acquired the company in a management buyout transaction from Bowmark Capital LLP for a consideration of €101.2m. The transaction will enable JacTravel to enhance its technological advancement and expand its reach to new markets. Vitruvian will facilitate JacTravel’s global expansion strategy. Earlier in 2007, Bowmark Capital LLP acquired a majority stake in JacTravel Limited, for a consideration of €13.9m. JacTravel reported revenues of €190m for the year ended 31 October 2013 and revenues of €155.3m for the year ended 31 October 2012. JacTravel has a workforce of 220 employees.
Travelport Ltd, a US company that provides aggregation, search and transaction processing services to travel providers and online and offline travel agencies, has acquired Hotelzon International Ltd, the UK-based online hotel booking company, from Berling Capital Oy, the Finnish investment holding company, for an undisclosed consideration. Hotelzon had processed approximately 1.2 million room nights in 2013 and has a workforce of 80 employees. The acquisition will enable Travelport to strengthen its hotel offering to both corporations and travel management companies (TMCs) and thereby provide easier services to its business travellers. The transaction will bring an additional 30,000 hotel properties into Travelport’s Travel Commerce Platform. Also, Travelport’s hotel content will be made available to Hotelzon’s travel agency and corporate customers, so as to expand its footprint in the international market.
Mitchells & Butlers Plan (M&B), the listed pubs and restaurants operator, has agreed to acquire the majority assets of Orchid Pubs and Dining Ltd, an owner and operator of pubs, restaurants and bars, for a cash consideration of €336.4m. The purchase consideration is subject to adjustment of up to €2.5m depending on the level of working capital and cash in the business at completion. This acquisition is expected to bring significant opportunities for value creation via cost savings of €7.6m annual synergies for M&B, along with growth via conversion of Orchid pubs to M&B brands. This acquisition is in line with M&B’s strategy of expanding its share of the UK branded pubs and restaurants market.
Fuller, Smith & Turner plc, the listed UK-based brewer and pub operator, has acquired a 51% stake in The Stable Pizza & Cider Ltd, the UK-based craft cider and pizza restaurant business, from founders the Cooper Family for a consideration of €9.2m. The transaction will allow Fuller, Smith & Turner to expand its business into Southern England. The acquisition will be earnings accretive to Fuller Smith’s after the completion of the first year.
Hawthorn Leisure Limited, the acquisition vehicle formed by US-based private equity firm Avenue Capital Group and UK-based private equity house May Capital LLP and it management to acquire and invest in pubs across the UK, has acquired 88 tenanted and leased pubs of R&L Properties Ltd for an undisclosed consideration. The deal is estimated to be valued at €38m. The acquisition is part of Hawthorn’s strategy to provide management support and capital investment to help to maximize growth of pubs.
La Tasca Group plc, the Spanish tapas bars & restaurants operator, acquired Ortega, the Spanish restaurant based in Leadenhall Market in London, from Tragus Group, owner of brands such as Café Rouge, Belgo and Bella Italia. The consideration was not disclosed.
The management of Shearings Holidays Limited (Shearings), the UK-based tour operator, has acquired the company in a management buyout transaction, backed by Lloyds Banking Group plc, from 3i Group plc and Indigo Capital Ltd, the UK-based private equity firm, for an undisclosed consideration. In February 2005, 3i had acquired Shearings from Bridgepoint Capital Ltd, CVC Capital Partners Ltd, Legal & General Ventures Ltd, Vision Capital Ltd and PPM Ventures Ltd for a consideration of €253m. 3i had a 67% stake in Shearings, while its management and Indigo held the rest.