Wednesday, July 2, 2014

News: £85m sale at Maplin

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Rotherham-based electronics retailer, Maplin, has new investor owners after Montagu Private Equity announced that it has reached agreement to sell the company to Rutland Partners for £85m.

Manvers-based Maplin sells a range of 15,000 products to tech-savvy hobbyists as well as general consumers.

The company's website attracts over 170,000 visitors every day and they operate a network of over 210 retail outlets throughout the UK and Ireland. They employ 2,500 staff.

Today Maplin generates over £220m in revenues, up from £100m when Montagu acquired the business in 2004, but it has gone through a challenging few years.

A new management team was introduced in 2012 to fundamentally reposition the business in a rapidly changing environment. In particular, they have refreshed the store experience, invested in a new web platform and refocused the business on innovation and "first in, last out" product ranges that so appealed to customers historically. In addition, the business has invested heavily in online cross channel retailing and fulfilment disciplines, all of which are contributing to a recovery in the business.

Current trading is strong with EBITDA (earnings before taxes) back in growth and like for like sales showing high single digit growth.

As part of financial backing from Lloyds in 2012, Maplin repaid the original acquisition finance that was used to fund the reported £244m secondary management buyout of the business in 2004. The new deal is being backed by specialist acquisition finance provider, Investec Growth & Aquisition Finance.

Rutland focusses on special situations where, through change, restructuring and investment, it can help improve the business. Rutland said that Maplin represents an exciting opportunity to build on recently improved performance in the business and help management deliver a broad based strategic plan aimed at releasing its further potential. Rutland is backing John Cleland and the incumbent management team.

John Cleland, CEO of Maplin, said: "Our strategic plans for Maplin represent substantial growth in sales and profit, continuing on the journey already mapped out that focusses on improved customer experience in all key channels, substantially broadening our range of products and innovation, and investing in our ability to offer the best electronics and technical advice to our customers.

"The management look forward to working closely with Rutland Partners in the future; they bring a wealth of strategic and operational experience which Maplin will benefit from as they support us in our plans to take the business forward."

John Lovering, retiring chairman of Maplin, added: "The team Montagu recruited, led by John Cleland, has done an excellent job. Personally, I think Maplin is on the threshold of a great period in its history. It is now time for a new shareholder to take the business forward, building on the strong foundations laid.

"We all wish the management and colleagues every continued success with their new backers."

Maplin is the first investment from Rutland Fund III. The transaction was led on behalf of Rutland by Nick Morrill, Ben Slatter, Tristan Craddock and Mike Reynolds. PwC acted as advisor to Montagu.

Nick Morrill of Rutland, said: "We are delighted to be able to invest in Maplin and recognise the great progress made by management so far in the recovery of the business but more importantly the potential still to be unlocked."

Launched by two technology enthusiasts in 1972 who were frustrated by the lack of good quality electronics components, Maplin Electronics became the experts' choice, with a reputation for the best product range and expertise.

Maplin's current turnover is a world away from the early days in Essex when founders, Roger Allen and Doug Simmons, remained in their full-time jobs for two years, and the company didn't make a profit.

In 2008 they moved to a 220,000 sq ft state of the art distribution centre and head office at Manvers in Rotherham.

Maplin website

Images: Maplin

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