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• Key Capital Partners provides development capital to premium street fashion label
• KCP announces bolt-on acquisition for Pandora Books
• KCP unlocks the equity gap for Midlands Companies
• Key Capital Partners to invest in Pandora Books expansion
• Roofing contractor goes up in the world with Key Capital Partners investment
• Neville Johnson finds perfect fit with Key Capital Partners
• Key Capital Partners’ first investment in Templine Recruitment
• Key Capital Partners announces final close of first fund
• Key Capital Partners expands operations
• Key Capital Partners first close raises in excess of £50m
• Key Capital Partners Launches New Website

Key Capital Partners provides development capital to premium street fashion label

Key Capital Partners (KCP) has backed the buy-in management buy-out of premium street fashion business, Sabotage Limited, in a £3.6 million deal. The investment from KCP also includes an element of development capital.

Trading as Fly53, Sabotage Limited designs and sells premium branded street fashion for men and women. Founded in the mid-90s by Will Rigg, Sabotage has grown Fly53 from a limited edition T-shirt collection into one of the UK’s best-known independent fashion labels.

Selling across the UK through independent fashion retailers, key multiple fashion retailers, such as House of Fraser and Scotts, and via online retailers including ASOS, Sabotage has recorded substantial sales growth in the last few years.

The primary wholesale business will now be strengthened by a broadened product offering and substantial marketing initiative. The company also aims to become a multi-channel operator by investing in its online retail offering, rolling out a series of concessions, and opening a select number of standalone stores in the UK. Sabotage, which already sells into Japan, Australia, Canada, Russia and Europe, also plans to further expand its overseas sales and distribution channels.

Founder and original shareholder, Will Rigg, is joined by a MBI team comprising Managing Director, Simon Smith, and Finance Director, John Bailey. Simon and John formerly worked at World Design and Trade Co Limited as Fullcircle Managing Director and Group Finance Director respectively. Will Rigg will continue in the role of Creative Director at Sabotage.

KCP partner, Mike Fell, also joins the board of Sabotage as a non-executive director, and has appointed a KCP operating partner as interim chairman.

Mike Fell said: “Despite the economic downturn and the resulting impact on discretionary spending, men’s fashion continues to experience strong growth, particularly in the area of branded streetwear. Having gained significant brand traction over recent years with Fly53, Sabotage is predicting 40 per cent growth in revenue for 2009, thanks largely to its plans to increase online sales through its own website and via other channels. We look forward to working with Simon, John and Will to realise their ambitions for the business.”

Alongside the investment from KCP, Sabotage’s existing majority shareholders, Harvey Jacobson and the Jacobson family, have also rolled over their exit proceeds from the business in order to continue to support the management team’s business plan. Harvey Jacobson commented: “I am delighted to retain a shareholding in Sabotage. The introduction of new investing management and the involvement of Key Capital Partners will now enable the brand to expand and realise its full potential.”

Simon Smith, Managing Director at Sabotage, added: “Since launching Sabotage in the mid-90s, Will Rigg has developed Fly53 into one of the UK’s leading premium street fashion brands. With the investment from KCP, and the ongoing support of Harvey Jacobson, the management team now plans to draw on its experience of building leading fashion brands to further develop the presence of Fly53 into a multi-channel fashion brand, both in the UK and internationally.”

Keith Watson, a director of luxury leather goods brand Aspinal of London, advised the management team on the corporate finance elements of the deal.

Advising KCP on the deal were Malcolm Friend and Leon Rowley at Friend LLP, who conducted financial due diligence. Carol House of Whitehead Mann provided management due diligence services, while Patrick Woodall of Pragma Consulting conducted commercial due diligence. KCP operating partner, Bob Johnson, provided IT due diligence services on the deal.

Sean Fitzgerald and Vicky Zivkovic led a team from Cobbetts LLP, which provided legal advice to KCP. Paul Osborne and Sean Williams from Fox Williams advised management, while Ingar Woolhouse of Harrison Clark advised Will Rigg. Reuben Berg and Russell Bateman at Berg Legal advised Harvey Jacobson.

KCP announces bolt-on acquisition for Pandora Books

Key Capital Partners ("KCP") announces that portfolio company, Pandora Books ("Pandora"), the UKs leading supplier of book collections to schools, has acquired competitor, Badger Publishing Limited ("Badger"), from EDCO, the Irish educational publishing division of Smurfitt Kappa Group plc.

KCP has supplied all of the funds required to support the bolt-on as part of Pandoras strategy for organic and acquisitive growth.    KCP originally backed the management buy-out of Pandora in April 2009.   Based in Kings Lynn in Norfolk, the company offers book collections that cover a wide range of reading abilities and meet all of the criteria of both the National Curriculum and the Primary Strategy for Literacy.  Pandora recently added to its catalogue and sales operations with the launch of a specialist website, which offers teachers and school librarians a one-stop collections bookshop.

Stevenage-based Badger operates in the same book collections market as Pandora.   The company was established in 1989 and also incorporates a thriving educational publishing arm.   The entire Badger team, lead by general manager and publisher, David Jamieson, will remain with the usiness following its acquisition.

Owen Trotter, KCP partner and non-executive director at Pandora, commented: "The acquisition of Badger Publishing will consolidate Pandoras position in the boxed collections segment of the educational book market.   By successfully integrating the two businesses, we will be able to maximise the combined entities operational and financial performance, raising its profile in the broader market and increasing critical mass."

Managing director at Pandora, Martin Green, added: "In the eight months since KCPs original investment, Pandora has experienced tremendous development, while maintaining the excellent standard of customer service that has been fundamental to our ongoing growth and success.   The merger with Badger creates a fantastic opportunity to combine our expertise to save busy teachers precious time by offering even better selections of titles and enhanced customer service.   With the enhanced market penetration that this acquisition will provide, we look forward to the next stage of our development."

Chairman at Pandora, Trevor Goul-Wheeker, led the acquisition for the firm.    He added: "Pandora has achieved strong year-on-year growth and, compared to the volatile consumer market, the educational book market has remained solid over the last  year.    We have strengthened our management team with the acquisition of Badger and are particularly interested in the growth achieved by its own publishing range.    The combined business will provide publishers with the ideal vehicle to reach schools with the best literacy and project-related books in the market."

Keith Ferguson, partner at PKF (UK) LLP in Ipswich advised KCP on the deal and performed financial due diligence.   He said: "This acquisition demonstrates KCPs commitment to supporting portfolio companies with continued investment.    The two businesses are an ideal strategic fit and with a government funded customer base are relatively insulated from negative pressure in the wider economy.   As such Pandora is well positioned for continued growth.

KCP unlocks the equity gap for Midlands Companies

Key Capital Partners ("KCP"), has increased its national footprint by launching a Birmingham office. KCP partner, Owen Trotter, has moved from the firm’s Cambridge office to head up the new venture.

KCP, which has a further office in Leeds, has bolstered its Midlands team with the appointment of Jonathan Lamb as investment manager. Lamb joins from KPMG’s Birmingham office, where he specialised in advising mid-market companies. At KCP, he will support Trotter in identifying investment opportunities among the region’s profitable and growing companies.

Trotter commented: “Despite current market forces, the Midlands economy remains an attractive place to invest, due in part to its status as a manufacturing and engineering hub.  Both sectors being supported by the depreciation of the pound against the euro. Additionally, these sectors have management teams experienced in riding out the type of difficult conditions we are likely to face for the next couple of years.

"As well as an abundance of attractive businesses with high growth potential, the Midlands also boasts one of the country’s strongest advisory communities, capable of structuring deals to best benefit both management teams and investors during this difficult period. Jonathan and I are excited about the possibilities that lie ahead for KCP in the Midlands, and look forward to strengthening our relationships with the region’s companies, banks and advisers."

Recent research by Corpfin Worldwide identified KCP as the top private equity house for ‘equity gap’ deals, based on later stage transactions completed between May 2007 and April 2008, with an enterprise value of between £5 million and £15 million.

 

Key Capital Partners to invest in Pandora Books expansion

Pandora Books, the leading supplier of book collections to schools, has been acquired by Martin Green, the Managing Director, and Key Capital Partners (“KCP”), the Cambridge-based private equity group, for an undisclosed sum.

The business, founded by Nick and Mike Ison in King’s Lynn in 1987, has seen significant growth in recent years as its catalogue business has complemented the service provided to schools by Pandora’s sales operations. The KCP investment is designed to accelerate further growth through these channels and a new specialist website.

Martin Green said “The Pandora team are very excited at the opportunities made possible by the KCP investment. We have just recruited a new Internet Marketing Manager, who will shortly be joined by new Sales & Marketing and Finance Directors to replace the retiring partners. We are also finalising plans for expanding our offices and warehouse to support the ongoing growth of the business.”

Trevor Goul-Wheeker has been appointed Non-Executive Chairman. Previously with Hammicks Bookshops and WH Smith, Trevor said, “It is good to return to the book trade and even better to be associated with a business as successful as Pandora. I look forward to supporting the management team to achieve their exciting growth plans and would hope that these may be complemented by selective acquisitions.”

Owen Trotter, Partner at KCP, who will also join the board as Non-Executive Director, added, “We are very pleased to have been able to invest in Pandora and its management at such an exciting stage in its development. The Ison family together with Martin have built a strong business and have identified a number of attractive opportunities for further growth.”

Senior Debt and working capital facilities for the deal were provided by Yorkshire Bank (Ian Mansell and Ian Howey - Directors, Specialist & Acquisition Finance, Midlands), who commented “we are delighted to have again worked with Owen and KCP, in supporting their latest investment. Pandora operates in an interesting niche sector and we look forward to supporting Martin, Trevor and KCP achieve their targeted plans to take this business forward.”

Keith Ferguson Partner at PKF UK LLP and Craig Hodgson Partner at Mills and Reeve LLP advising the vendors commented 'we know how proud Nick Ison is of the business and he is very pleased that it is passing into safe hands with new owners who have a clear view of how they will take the business onto the next stage of its development.'

KCP were advised by Grant Thornton (Chris Key and Mark Gillings), AMR (Peter Howson) and Birketts LLP, Cambridge (Adrian Seagers and Nick Burt). The vendors were advised by PKF (UK) LLP (Keith Ferguson and Mathew King) and Mills and Reeve LLP (Craig Hodgson). The Bank was advised by Martineau Johnson (David Doogan).

ENDS
Press contact Chris McCrudden @ MC2 – 0161 2361352

Roofing contractor goes up in the world with Key Capital Partners investment

The Leeds office of private equity firm, Key Capital Partners (“KCP”) has completed its second deal in just over a week, after investing £2.3 million in thriving North East based roofline contractor and supplier, JD Plastics and Rooflines Ltd (“JD Plastics”), valuing the business at in excess of £5 million.

The deal sees KCP acquire a majority stake in the Bishop Auckland-based business, which has developed a strong presence as both a sole and sub-contractor in the social housing sector in the North East since its foundation in 1994 by father and son team Graham and Jamie Dent.

Consisting of two distinct operations, JD Plastics installs roofline products in housing refurbishment projects, while its supply division provides Swish-branded roofline products directly to house builders. The company’s success to date has seen sales climb from c. £1.5m in 2006 to a projected £5m in 2008, with KCP’s investment set to play a significant role in furthering company growth.

Following the deal, Jamie Dent will remain in place as managing director, while KCP introduces two senior executives, Jolyon Harrison, former executive chairman of NorthCountry Homes, as chairman, and David Bradley, former UK Finance Director at Wolseley, as finance director.

Jamie Dent said: “Our partnership with KCP puts us in an excellent position to take advantage of a buoyant refurbishment market. Not only will it provide the investment required for us to roll out the benefits of our products and services in the North East and beyond, but it also readies the company for significant growth in the future.”

Peter Armitage, partner at KCP in Leeds said: “JD Plastics is a company with a tremendous market position in the North East. Its management team has made great strides in capturing a share of a niche market, which has made it an excellent investment opportunity. We look forward to supporting the company as it replicates this success across the North of England.

The KCP team of Peter Armitage and Mark Buttler was provided with legal advice by a team led by Nick Watson and Jo Stephenson at Hammonds in Leeds. Financial due diligence was performed by Tait Walker in Newcastle, led by Michael Smith. Yorkshire Bank, led by John Bullock, provided debt funding for the transaction. Graham and Jamie Dent were advised by corporate finance advisers Neville Bearpark and Zara Lane at Newcastle accountants unw, and received legal advice from Anthony Walters & Co, along with accounting advice from Paul Anderson of Jackson & Anderson Chartered Accountants.

Neville Johnson finds perfect fit with Key Capital Partners

The Leeds office of private equity firm Key Capital Partners (“KCP”) has backed the incumbent management team in a secondary management buyout of Trafford Park fitted furniture company, Neville Johnson.

Neville Johnson is a leading designer, manufacturer and installer of high quality bespoke fitted furniture for home studies, bedrooms, lounges and home cinemas. Targeting high net worth individuals, its recent success has been driven by a reputation for quality coupled with a high level of customer service and satisfaction.

KCP has invested £4.25 million for a majority stake in the business in a £12.5 million transaction following the exit of Endless LLP following its investment in 2006. The management team are re-investing the majority of their proceeds from the sale, demonstrating their confidence in the future of the business. Driven by capital investment, product development and an enhanced marketing strategy, Neville Johnson has seen sales increase from £12 million to £17 million during the period of ownership by Endless. The company aims to continue this impressive growth with KCP’s support and investment.

Nigel Pailing, CEO of Neville Johnson, said: “We fully expect to forge a strong partnership with KCP and we will be working closely together to maintain our current level of growth. We’ve had a great experience with Endless and I am sure we will see similar success with the team at KCP.”

Key Capital Partners’ first investment in Templine Recruitment

Independent private equity fund, Key Capital Partners (KCP), has made the first investment from its maiden fund, backing the management buy-out of a Birmingham-based recruitment company.

Templine Recruitment Limited, which has branches in Leeds, Luton, Coventry and Leicester, provides temporary labour to customers in the distribution, warehousing and industrial sectors. The company also provides ‘on site’ recruitment services to a number of major logistics and distribution companies.

KCP has invested £4.3million to acquire a significant minority stake in the business, and back the management team led by managing director Tony Bucciero and newly appointed non-executive chairman, Stewart Rogers.

Partner at KCP, Owen Trotter, who will also join the board of Templine as a non-executive director, commented: “Templine has a clear focus on customer service, which has resulted in impressive growth over the last few years. Tony and his team have a strong plan for the continued development of the business and we are looking forward to working with them.”

Tony Bucciero added: “The distribution, warehousing and industrial sectors have remained particularly buoyant throughout the UK and have a strong need for dedicated recruitment services. We will aim to continue to build on the good reputation we have in this sector and expand on the services we offer to respond to the needs of the market.”

Senior debt and working capital facilities for the deal were provided by Yorkshire Bank Specialist and Acquisition Finance, led by Ian Howey and Ian Mansell.  Commenting on the deal Mansell added: “We are delighted to have supported Key Capital Partners in their investment and  are particularly pleased that this has involved a Birmingham based business with excellent prospects, led by a dynamic management team.”  
KCP was advised by Sean Fitzgerald and Adrian Cutler of Cobbetts and Graham Elsworth and Dougal Baxter of BDO Stoy Hayward, whilst Templine’s management team was advised by Simon Clewlow and Martyn Pilley of Grant Thornton and Paul Wakefield of BPE.

Simon Clewlow, assistant director at Grant Thornton in Birmingham, commented: "This transaction demonstrates that, in the mid-market, bank and private equity appetite for high quality growth businesses such as Templine remains strong, despite fears about the impact of the recent credit crunch.

"With Tony's drive and eye for customer service, coupled with the KCP team's sector credentials and their ability to add real value to the business, we expect Templine to be one of the big success stories of the next few years."

Key Capital Partners announces final close of first fund

Key Capital Partners (KCP), the UK-based private equity fund management company founded to address the ‘equity gap’, has announced the final close of its maiden fund.

KCP, which was launched in December 2006 and first closed in April 2007 at more than £50 million, has received additional commitments from a number of new investors, including local authority pension funds, family trusts and high net worth individuals. This takes the total funds raised to £100 million.

KCP, whose three investment partners are ex-Granville Baird and Apax Partners, is focused on making investments in the ‘equity gap’ and describes its ‘sweet spot’ as being in the £1m-£5m equity range, with the ability to complete larger investments.

The fund is targeting growth businesses throughout the UK and will look at all later-stage transactions, including MBOs, MBIs, IBOs, development capital deals and partial realisations. Its blue chip investors include SVG Capital, West Yorkshire Pension Fund, East Riding Pension Fund, West Midlands Pension Fund and the Cayzer Trust.

Commenting on the close, Partner, Mike Fell, said: “Our initial research showed that there are around 15,000 UK companies within our target market and very little competition. Our investors needed little convincing of the market opportunity and this partly explains the speed at which we were able to raise the fund.”

Fellow Partner, Peter Armitage, added: “Our aim is to become the UK market leader in this space and the first port of call for anyone looking for sub-£10m investments. To achieve this, we are already planning to extend our office network and increase the size of our team.”

Owen Trotter, Partner, said: “It is difficult to think of another team in this space with our experience and track record and that is why we have been able to secure our blue-chip investor base.”

Key Capital Partners expands operations

Key Capital Partners has strengthened its operations with the addition of a new investment director.

Based in the company's Leeds office, Mark Buttler joins from KPMG Corporate Finance, where he was based in Leeds and worked across the North of England on middle-market private equity and M&A transactions, and nationally in the information and communication sector.

In his new role, Mark will be responsible for developing and maximising opportunities from his advisory and business contacts in order to source and manage deals for the fund, which has already received significant interest from investors and, at first close, raised over £50 million.

The reaction that the fund has had highlights the need in the market for investments in the range of £1-5 million to be provided to small and medium sized businesses looking to develop their offering and expand their territory or product and service lines, Mark comments.

The corporate finance arena has undergone significant change over the past few months as the Chancellors March budget imposed new legislation for venture capital trusts restricting them to maximum investments of £2 million from any new funds raised.

Although this is probably good news for companies looking for investments of below £2 million it means that there will be far fewer investors addressing the space between £2 million and £5 million, where mid-market funds usually begin to take an interest.

Key Capital Partners first close raises in excess of £50m

Key Capital Partners (KCP) has today achieved a first close of its first private equity fund having raised in excess of £50 million.

The Fund, aimed at providing investments of between £1million and £5million to fill the ‘equity gap’, was launched in December and has received significant interest.

Investment to date has come from a number of blue chip investors including local authority pension funds, Fund of Funds, family offices and high net worth individuals, including SVG Capital, West Yorkshire Pension Fund, East Riding Pension Fund, West Midlands Pension Fund and Cayzer Trust

Commenting on the close, Mike Fell, founding partner, said: “The speed with which we have managed to raise this amount confirms the unique status of our offering and the benefits of our fund structure which sees more value returned to our investors.

“Investors, like us, have identified that funding at the £1m to £5m level has been increasingly neglected. We are open for business and keen to invest in management teams looking to grow their businesses.

Key Capital Partners Launches New Website

Independent private equity fund management company, Key Capital Partners has launched its website, aimed at assisting growth businesses with locating finance.

Key Capital Partners has been established by partners Mike Fell, previously managing director at Granville Baird Capital Partners, Owen Trotter formerly a partner at Royal Bank of Canada and Peter Armitage, ex managing director of Yorkshire Funds for YFM Group.

With an average of seventeen years experience in the private equity industry, this probably makes it the most experienced deal team to come to the sector.

Mike Fell comments on the launch of the new website: “This new site provides useful information to members of the public about the nature of our investments, as well as help to communicate the company’s key messages to a wider audience.”