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Kester books 4.2x return on Jollyes sale to TDR Capital

British private equity firm TDR Capital will take a majority stake in Jollyes, one of Britain’s largest privately owned pet food retailers, with previous owner Kester Capital subsequently notching a 4.2× return and an IRR of 29% on its exit from the business.  

According to Kester Capital, the Jollyes sale represents its third consecutive exit over 4x and seventh consecutive exit over 3x. Over the course of the firm’s ownership since 2018, the retailer’s network of stores expanded from 64 to 100 and its employee base doubled to over 1,200.

The deal is expected to complete in April, with former Asda CEO Andy Bond due to become Non-Executive Chairman.

According to Jollyes, the investment will go towards extending the retailer’s reach into new locations and “increasing competition” in the £6bn UK pet market through an accelerated rollout of its community pet clinics. The retailer has plans to open 12 new stores over the next 12 months and has agreements secured for locations in Northampton, Nuneaton, Chester and East Kilbride.

In a statement, Adam Maidment, Managing Partner at Kester Capital, said: “I’m incredibly proud of what we have achieved with Jollyes. We have doubled the workforce, doubled the revenue and more than doubled the profitability, building one of the largest specialty pet retailers in the country. It’s a great success story and exactly the kind of value creation story Kester is about.”

Gary Lindsay, Managing Partner at TDR Capital, added: “In Jollyes, we identified a solid business with excellent foundations and significant potential to grow even more ambitiously in the years to come.

“Through our investment, we will deploy our significant retail expertise and support the company in rolling out its store expansion plans even more rapidly, including opening more grooming and veterinary-led community pet clinics.

“We are confident that Jollyes can further cement itself in the pet retail sector and increase the competitiveness of the market, which will benefit customers, colleagues and suppliers alike.”

In December 2023, Kester Capital had been exploring “strategic options” with financial services firm Houlihan Lokey with regards to the Jollyes sale.

TDR Capital was advised by HSBC, Barclays, PwC and CMS. Kester Capital was advised by Houlihan Lokey, PwC and Osborne Clarke. Jollyes’s management was advised by Jamieson, Blick Rothenberg and Osborne Clarke.

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