The management team of outdoor retailer Mountain Warehouse has completed a GBP85m acquisition of the business backed by Royal Bank of Scotland and Alcentra.
The transaction enables the team, led by founder and chief executive Mark Neale, to take full ownership of 169-strong chain, while providing an exit for its mid-market private equity backer LDC which acquired a significant minority shareholding in August 2010 as part of a GBP47m buyout.
The transaction delivers a strong return for LDC, more than doubling its original investment within three years, during which time the business has traded through two recessions.
Mountain Warehouse has grown strongly over the three years of LDC’s investment despite the challenging consumer environment, with turnover rising from GBP47.5m to GBP75.6m in the year ending February 2013. The retailer has opened 60 stores and created over 500 jobs in the period. Carl Wormald led the original investment for LDC and also delivered the exit.
Neale says: “We have had fantastic support from LDC in helping us expand the business despite tough market conditions. Having had four private equity investors over the last 16 years, we have now taken the opportunity to buy back full control and to push ahead with our exciting expansion plans. I am delighted that RBS and Alcentra are backing the team for this important next phase of growth.”
Neale says he now sees potential to expand to 300 stores across Europe as well as to continue to grow its fast-growing online business which is now shipping to more than 100 countries. Mountain Warehouse already has six stores in Poland and more openings are planned there.
The company was founded in 1997 with its first store in Swindon. It now targets market towns and locations popular with walkers and tourists. Several of its stores are in former Woolworths sites. New stores have recently opened in Harrogate, Whitstable and Totnes.
Bertie Aykroyd, investment director at LDC, says: “Mark and his team have delivered a strong performance in some of the most difficult conditions the retail sector has seen for many years. Thanks to a clear strategy, a highly capable team and a strong proposition, they’ve taken the business to the next level where it can now continue to grow and develop.”
Vendor due diligence was completed by Deloitte (financial) and Pragma (commercial).
