The management team at musical instrument retailer GAK has completed a management buyout (MBO) following investment from Risk Capital Partners, with the support of specialist business advisory firm FRP.
Brighton-based GAK was founded in 1992 by CEO Gary Marshall, and is a leading musical instrument retailer, supplying a wide range of guitars, amps, drums, keyboards and music production software.
The business is now preparing for a period of growth, having been acquired by co-managing directors Max McKellar and Ian Stephens, with investment from Risk Capital Partners, which becomes the majority shareholder.
FRP Corporate Finance led the transaction, which will allow the business to expand its online operations and widen its product range, including by exploring new markets.
Max McKellar has been with the business for almost 28 years and Ian Stephens joined in 2009, following an extensive career in the retail industry. Since the pair were appointed as co-managing directors in 2016, revenues have grown by more than 50 per cent, with sales on track to exceed a record GBP40 million in the current period.
While founder Marshall has stepped back from the day-to-day running of the business in recent years, he retains a stake in the company and will continue to advise the management team in a consulting capacity.
Luke Johnson of Risk Capital Partners joins the business’ board as chairman.
McKellar and Stephens say: “We are extremely excited about working with Risk Capital Partners on the next phase of GAK’s evolution, both as a company and a recognisable and trusted brand. We are fortunate to have an exceptional workforce and to be supported by our highly-experienced and talented senior management team who will collectively continue to help us implement the many growth initiatives we have identified.
“Both GAK and our industry as a whole have encountered and overcome many significant hurdles in the past few years and we feel we are now perfectly placed to push the business forward and take advantage of the opportunities we see ahead of us in the short and long term.”
GAK was originally founded from a market stall and today more than two thirds of its revenues are generated online.
Its three Brighton stores are described as ‘an Aladdin’s cave of guitars, amplifiers, drums, keyboards and other musical instruments’, with brands including Fender, Gibson, Roland and Yamaha.
Marshall, says: “I’m delighted with the outcome of the deal. FRP were excellent throughout the whole process in identifying the right partner for the company for its next phase of development and were instrumental in getting the deal across the line”.
Adrian Alexander, partner at FRP Corporate Finance, says: “This deal marks the start of a new chapter for GAK, which has built a distinctive identity and is highly-regarded among musicians. The brand saw a significant boost in the last year as more people picked up instruments during recent lockdowns and holds fantastic growth potential. Working alongside Risk Capital Partners, I’m confident GAK can achieve its ambitious plans.”
The management team and shareholders at GAK were advised by Coffin Mew (legal) and Watson Associates (taxation).
Risk Capital Partners was advised by RSM and Irwin Mitchell.
