investments


Gear4Music

Online retailer of musical intruments

March 2012

£3.4 million investment

Exited in June 2015

www.gear4music.com

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“The team at KCP spoke our language. They structured the deal that allowed us to make the most of the market opportunities we had identified, and also encouraged us to think about our business in a way that we had not done before. Most importantly, they helped us to professionalise our approach and we now react to opportunities with far greater insight.”

Andrew Wass, CEO | Gear4Music

The business...

Gear4music is an online retailer of musical instruments and equipment based in York. The business was founded by CEO Andrew Wass in 2003 with the support of two angel investors. At the time of KCP's investment in 2012 the company was making sales of c.£10 million.

The deal...

KCP invested £3.4 million to buy-out the two angel investors and provide £1.5 million of development capital to the business. At the same time an option scheme was created to attract and retain additional senior management.

KCP value-add...

During our investment we:

  • Carefully crafted an investment structure to align all stakeholders with growth, support investment and incentivise incoming management
  • Introduction of a Non-Executive Chairman and Financial Director from our network and significant involvement in hiring other senior talent
  • Supportive of significant investment in IT, European websites, premises, people and stock to facilitate rapid growth
  • Instrumental in IPO positioning and process, held 65% of investment through lPO in order to maintain an orderly and supportive market for the Company's shares

Exit...

In 2015, the growth profile of the Company merited further investment to support the push into Europe. KCP introduced the Company to a specialist AiM broker who assisted the Company in achieving an AiM IPO to fund an accelerated European roll-out and a partial realisation for KCP.

Key highlights...

  • Significant uplift in sales, growing from £10 million at the time of KCP’s investment to £47 million at exit
  • As a result of the growth strategies adopted, the value of the company increased by over £120 million
  • This uplift in value created over £50 million value for the founding shareholders at the point when KCP exited