Caledonia Investments has invested GBP24 million in cash to acquire a 20% preferred equity interest in B&W Group Limited (“Bowers & Wilkins” or the “Company”), a well-established and rapidly growing British company which designs, manufactures and distributes high-end audio equipment. Bowers & Wilkins has been led by Joe Atkins, its Chairman, since 1996.
The investment in Bowers & Wilkins represents a good fit with Caledonia’s strategic aims in the unquoted sector. The Company is managed by an experienced and stable team, has a strong balance sheet and benefits from a global operational footprint and exposure to expanding markets where its product innovation is highly valued by its customers.
Caledonia’s participation in the Company, by way of a significant minority shareholding with board representation, also fits well with Bowers & Wilkins’ desire for a long-term investor, supportive of its development requirements and aligned with the strategic aims of its existing shareholder base.
The investment has been structured through newly created preferred ordinary shares in Bowers & Wilkins (“Preferred Ordinary Shares”) that will provide a dividend yield to Caledonia whilst fully participating in the equity value of the Company. The Preferred Ordinary Shares carry the same voting rights as the existing ordinary shares and on a realisation of the Company, or other return of capital, will rank in priority to the ordinary shares in terms of both dividends and capital invested.
Caledonia has acquired its 20% interest through the purchase of 200,000 Preferred Ordinary Shares from each of Sofina S.A. (“Sofina”), the quoted Belgian investment holding company, and B&W International Limited (“BWI”), a company of which Joe Atkins is the ultimate beneficiary.
In its most recent audited consolidated accounts to 30 September 2010 Bowers & Wilkins reported earnings before interest, tax, depreciation and amortisation (“EBITDA”) of GBP13 million, consolidated profit before tax of GBP6.5 million and consolidated gross assets of GBP80.2 million. The Company is expected to report EBITDA in excess of GBP18 million for the year ended 30 September 2011.
Duncan Johnson, Head of Unquoted Investments at Caledonia, says: “We are delighted to be partnering with Joe Atkins on the next phase of the Bowers & Wilkins’ journey. Bowers & Wilkins is a great business with a truly global reach across the range of premium audio segments where it competes.
Bowers & Wilkins fits the Caledonia investment model where we look to match our capital with businesses which seek to grow over the longer term and our partnership model is valued by all stakeholders.”
Atkins says: “Caledonia’s investment in Bowers & Wilkins provides us with a UK based, long term supportive investor to help us on the next phase of our growth strategy. The Caledonia model is unique in the UK in providing capital to private businesses such as ours and we were particularly attracted by its ethos of supporting investee companies over the longer term.
We are also delighted to welcome Duncan Johnson to our Board and look forward to the valuable contribution he and Caledonia will make going forward.”
