BlueGem exits DMC Group to Lion Capital
BlueGem Capital Partners (BlueGem) has sold Crafts Group Ltd (DMC) to and Lion Capital (Lion). The DMC Group comprises a portfolio of leading European brands in the needlecrafts space, including DMC, Wool and the Gang (WATG) and Sirdar. The portfolio also includes Tilsatec, a leading brand of high- performance technical yarn.
BlueGem formed The DMC Group in August 2016 as a consolidation platform for complementary needlecraft brands, beginning with the simultaneous acquisition of DMC and WATG. BlueGem identified in DMC an unloved and undermanaged company with amazing brand heritage, high-quality products and untapped growth opportunities. The addition of WATG was instrumental to the launch of an intensive rejuvenation program which included product innovation, marketing, PR and social media and e-commerce. In 2017, the acquisition of Sirdar and the opening of a London head office solidified The DMC Group’s position as the European leader in the needlecrafts space, led by blue-chip top managers. In 2018 The DMC Group generated over EUR90 million of sales across 100-plus countries.
Marco Capello, Founder and Managing Partner of BlueGem, says: “We are proud of the rapid and significant business improvements that have been achieved at The DMC Group, where we partnered with a high calibre management team. Thanks to the team’s work, The DMC Group is now the undisputed market leader in an attractive and resilient niche. There remains substantial potential for growth within the company, and we are happy to hand it over to Lion Capital. Thanks to its unparalleled industry contacts and expertise, we believe Lion will successfully add to the business’s strong existing foundations. For BlueGem, the sale of The DMC Group is the first exit from our Fund II’s portfolio and generated a Cash-on-Cash of 2.7x and an IRR of 55 per cent.”
James Cocker, Partner of Lion Capital, says: “We have followed The DMC Group closely for some time and admire the value creation strategy that the team has implemented under BlueGem’s ownership. The business has a wide array of levers to drive continued operational improvement over an extended period, and substantial opportunity for further acquisition-led growth on a global basis. Our proven track record of working with leading global brands makes The DMC Group a perfect fit with our investment strategy, and we look forward to working with the team to help capitalise on the business’s tremendous potential.”
Justin Wraight, CEO of The DMC Group, says: “BlueGem have been highly supportive partners in the formation and development of The DMC Group. From these strong foundations we look forward to the next phase of growth with Lion Capital, who share our excitement for the future and have the experience to help us continue to grow and optimise our portfolio of iconic needlecraft and technical yarn brands.”
Lion Capital was advised by Proskauer, PwC, DLA Piper and Pragma Consulting. BlueGem was advised by Baird, PwC, Baker & McKenzie and LEK.