Private equity house Key Capital Partners (KCP) has exited its interest in Gear4Music, selling its remaining shares for GBP9 million, which combined with earlier partial exits has generated a five times return on investment.
The GBP55 million turnover online musical instrument retailer has seen growth in recent years following KCP’s backing in 2012 when it took a 30 per cent stake in the company.
Established in 2003 and based in York where it has a showroom and distribution centre, Gear4Music is an online seller of musical instruments including guitars, drum kits, digital pianos, saxophones and cellos, plus recording and studio equipment.
KCP’s GBP3.4 million investment, made in March 2012, enabled Gear4Music to expand its international e-commerce platform. At the time, the company had sales of only GBP10 million, but it quickly went on to complete an IPO in June 2015, valuing the company at GBP28 million and raising GBP10.3 million of cash.
At the time of KCP’s final sale of shares the company was valued at GBP73 million.
Gear4Music recently reported that overall revenues have increased by 73 per cent, with European sales from March to September 2016 increasing by 160 per cent.
Peter Armitage, partner at KCP, and a non-executive director of Gear4Music has now stepped down from the board.
He says: “Playing a key role in the phenomenal growth of this retail success story has been a very exciting experience. It has been a privilege to work with such a talented team and help guide them through the IPO process.”
Andrew Wass, founder and chief executive of Gear4Music, says: “KCP’s decision to invest in the business in 2012 has been integral to our subsequent development and setting us on the path to growth. With Peter stepping away from the board, now would seem the appropriate juncture to recognise the very significant contribution they have made over a number of years. I would like to wish both Peter and KCP all the very best in their future endeavours.”
