COMPANIES: Kindred Capital to PureGym

Published by Directorzone Markets Ltd on April 3, 2017, 9:00 am in News, Other





Bannatyne £112m | Albion Knitting Company | Mous £1m | Send For Help £6.1m | Kindred Capital | Hat Trick £36m | Alliance Pharma £97.5m | Pure Gym £159.9m


Off-GRID: * Exova £328.6m


News about 8 UK growth companies and/or accelerators + turnover in the GRID marketplace 26th March – 1st April 2017:


BANNATYNE: pays out £11.5m | The Sunday Times. March 26, 2017
DZ profile: The Bannatyne Group Plc
Business: health chain which operates 66 Health Clubs, 37 of which have bespoke Spa facilities, and 5 Hotels. Has more than 200,000 members. Last year the group acquired two gyms in Orpington and Norwich.
Launched: 1996
Location: Darlington
Founder: Duncan Bannatyne, 67, former Dragons’ Den star was awarded an OBE for his charity work and is worth £187million, according to the Sunday Times Rich List, placing him at number 515. After time in the Navy, he started his first business when he moved to Stockton-on-Tees aged 29 and bought an ice cream van for £450.
Staff: 3,000. Justin Musgrove, Chief Executive
Financials: saw 2016 pre-tax profits rise from £7.7m to £11.6m on revenue 11% higher at £112.2m. Increased revenue from spa and members was the main reason for the increase in operating profit.
Investment: Duncan Bannatyne is the sole owner of the company, valued at between £280m and £300m.
News: paid dividends of £11.5m last year, when it shelved plans for a £300m float. The star pulled its stock market plans after regulatory scrutiny. The aborted float led to a one-off cost of £2.4m.

Is it time to find a factory that’s closer to home? | Laura Onita, The Sunday Times. March 26, 2017


DZ profile: The Albion Knitting Company Limited
Business: make sweaters and cardigans at their £200,000 knitwear factory for ALEXANDER MCQUEEN, GIVENCHY and CHLOÉ.
Launched: 2014
Location: Haringey, north London
Founders: Jamie O’Neill, 37, and Chris Murphy. Previously they had helped to set up factories in China for Dawson International, the cashmere maker that collapsed in 2012.
Staff: 30
News: Their decision (to come home) was partly due to a desire to pass on their expertise. But they also wanted to tap into a growing demand for products with a Made in Britain label — seen as a badge of quality. The duo have brought Chinese machinery and know-how with them — seven of their 30 employees are Chinese.


DZ profile: Mous Products Ltd
Business: iPhone-case supplier. Mous sells about 500 of its shock-absorbing cases a day to 56 countries. It aims to manufacture half-a-million units this year
Launched: 2014
Location: Ipswich
Founders: Joshua Shires, 27, James Griffith & James Day
Financials: sales of about £1m last year
News: it still makes sense to outsource production overseas. Mous looked at factories at home but favoured Dongguan in southern China. “The quote [for production] we got in England was $50,000 (£40,000). In China we were looking at $9,000,” said Shires.

SEND FOR HELP: Alone and in peril? That’s when you need our panic button | Laura Onita, The Sunday Times. March 26, 2017
DZ profile: Send For Help Limited
Business: technology company that makes portable panic buttons, about the size of a car key, to help lone workers and vulnerable people alert emergency services if they get into trouble. Send for Help protects more than 250,000 people, including community nurses who may carry a bag of drugs, traffic wardens (not always popular if they give someone a ticket), and hotel porters working through the night on their own, said James. Many police forces use it to safeguard victims of domestic violence or people on witness protection programmes. Once the button is activated, a user can speak via the device to a controller at Send for Help. Staff are trained and sit an exam before they can answer calls. Clients typically pay a £10 monthly fee for each device. Clients include the NHS, the POLICE, TALKTALK, BRITISH GAS, PETS AT HOME and more than 150 local authorities and 200 housing associations. 
Launched: 2010
Location: Epsom, Surrey
Founders: brothers James, 43, (chief executive) and Will, 39 (marketing director) Murray set up the business after selling their previous venture, a digital memory card and ink cartridge retailer, for a “six-figure sum”. Third-generation entrepreneurs: their father, Jan Murray, founded the retailer PC World, which he sold to Dixons in the early 1990s. Jan exited his second venture, Internet Technology Group (ITG), for $250m seven years later. Their grandfather, Mark Murray-Obodynski, a Pole who escaped to Britain from a prisoner-of-war camp in Germany, set up the REW chain selling electrical goods.
Staff: 80
Financials: reported pre-tax profits of £890,000 on £6.1m revenue last year. Revenues are expected to hit £8m this year
Investment: Although they have had interest from outside investors, the siblings intend to grow the business organically. Apart from their father, their venture is also backed by a few small shareholders. The Murrays own about 90% of the company.
1. Sales have grown 70% over three years, earning it a place in the latest Sunday Times Fast Track 100 list of Britain’s fastest-growing private companies.
2. They started to build the software themselves and then outsourced it to Skyguard, a company they went on to buy a year later. In 2015 they borrowed money from their father to acquire a competitor, Guardian24, for a “seven-figure sum”.
3. They plan to develop more devices and to increase UK sales before expanding overseas. Further acquisitions are on the cards.

UPDATE: Panic button start-up in £10m deal to buy rival | Laura Onita, The Sunday Times. June 18, 2017
4. …has bought its rival ROCKSURE SYSTEMS in a deal worth £10m.

It’s a dangerous world – but we can fight off the bad guys of the dark web | Peter Evans, The Sunday Times. June 10 2018
 5. ...has seen record growth on the back of the rising threat of attacks on employees. The company’s revenue increased by 56% to £12m in its most recent financial year, while profit rose 25% to £3.4m. James Murray said that the growth was in part down to employers’ concern for their staff.  ....the corporate manslaughter act, passed a decade ago, holds companies responsible for casualties resulting from serious management failings. One of Send for Help’s customers is drainage company LANES GROUP. It sends engineers out to remote parts of the country at all hours and senior management were concerned they were not properly protected if problems occurred. 

KINDRED CAPITAL: Meet Leila Zegna and Tracy Doree: The founders behind maverick VC firm | Harriet Green, City A.M. March 27
DZ profile: Kindred Capital Llp
Business: early-stage VC firm. Companies funded: Peter Thiel and Max Levchin-backed Peter Johnston of LYSTABLE; Julia Salasky, whose platform CROWDJUSTICE enabled the crowdfunding of the People’s Challenge to Brexit; Ted Nash, the 25 year-old serial entrepreneur who built his first company before he was 15; FAREWILL, which enables you to create a will online in 15 minutes for £50; STREETTEAM, where people earn tickets by promoting them to friends using P2P sales software. Kindred’s initial investments range from £200,000 to £1m. Just last week, it was part of Lystable’s $10m Series A funding round, which will secure the British firm’s expansion across the US.
Launched: 2015
Location: London EC1
Founders: Leila Zegna, 34 and Tracy Doree, 33, Mark Evans and Russell Buckley, who stumped up a fifth of the fund out of their own pockets. “We had invested in 14 companies as a foursome before Kindred,” explains Doree.
1. A unique model - “equitable venture”- where every founder Kindred invests in becomes a co-owner of the fund. Via a carry points system, once money has been returned to the fund’s investors (private individuals, family offices and institutions), the entire network shares up to 20 per cent of the fund’s profits. “We invest in them and they invest in us,” says Zegna.
2. Kindred is not sector-specific, it simply looks for the very best people who are solving big problems. Kindred has met 700 startups. It’s invested in 12; two-thirds of those were introduced by entrepreneurs they had relationships with already.
3. … the Kindred ecosystem is starting to prove its worth. … founders are going for second rounds of funding.

* EXOVA: Suitors circle industrial testing giant that counts London Underground among clients | Shruti Tripathi Chopra, City A.M. March 27
DZ profile: Exova Group Plc
Business: laboratory-based testing giant. Exova counts LONDON UNDERGROUND as one of its clients. The industrial testing giant worked with the transport operator on fire testing for a number of years. It also helped London Underground to develop fire safety standards across its network. Other clients include oil giant CHEVRON, HITACHI, AIRBUS and DUBAI METRO.
Launched: 2008
Location: Edinburgh
Staff: over 4,000 employees. Allister Langlands, chairman
Financials: Last month, the company reported a 7.7 per cent increase in adjusted pre-tax profit to £43.5m for 2016 while revenue grew 10.8 per cent to £328.6m.
Investment: FTSE-350 firm which floated on the London Stock Exchange in 2014. CLAYTON, DUBILIER & RICE (CD&R), the American private equity giant … is keen to sell its controlling stake
News: Industrial giant ELEMENT MATERIALS TECHNOLOGY, Zurich-based investment firm JACOBS HOLDING and private equity house PAI PARTNERS have submitted proposals to snap up the firm, Exova confirmed in a statement. Goldman Sachs is acting as adviser on the deal and is weighing up potential suitors.


Element Materials agrees £620m deal for lab tester Exova | Javier Espinoza, FT. April 19, 2017 by: 

Exovahas accepted a £620.3m cash offer from Element Materials Technology Group, the companies said in a joint statement on Wednesday. Element, which is majority owned by BEV, the latest fund of Bridgepoint and was acquired by BEV in March last year, said the acquisition will help boost Exova’s presence in the aerospace, oil and gas sectors, where the lab testing specialist has recently struggled. HSBC is acting as an advisor and providing financing for Element and Bridgepoint.


HAT TRICK: Have I Got News For You - dramatic next episode | Alex Lawson, The Evening Standard. March 28
DZ profile: Hat Trick Productions Limited
Business: TV comedy-hit factory with Outnumbered and Episodes helping the coffers
Launched: 1985
Location: Camden
Founder: managing director Jimmy Mulville, 62, radio-turned-TV producer masterminded Hat Trick with then-girlfriend Denise O’Donoghue (and comedian Rory McGrath) while working together on Who Dares Wins. They married, created Whose Line Is It Anyway? for TV (the first UK show sold to America), Have I Got News For You (HIGNFY) - now running for 26 years, Father Ted.
Financials: revenues of £36m (up 20%). In 2016, pre-tax profits rose from £86,000 to £2.1m ...paid £3.5m in dividends. 

Investment: Mulville and his third wife, Karen, own 90% of the company.

1. Mulville recounts the company’s nadir, shortly after selling 49% to private-equity firm Kleinwort Capital (now AUGUST EQUITY) on the back of a Nineties boom. “Effectively, we paid off the mortgage on the house and put a massive £23 million debt on the business. They thought we would buy businesses but other companies were concerned by our debts.” David Young, founder of Eggheads maker 12 Yard Productions, eventually rode to the rescue, ultimately helping sell the combined businesses to ITV for up to £35m in 2007.

Derry Girls producer Hat Trick Productions eyes sale | Simon Duke, The Sunday Times. June 3 2018

2. on the hunt for a prospective buyer ....has hired  STELLA EOC to sound out acquirers. 


ALLIANCE PHARMA: doubles sales after acquiring arch rival Sinclair's healthcare products | Shruti Tripathi Chopra, City A.M. March 29, 2017
DZ profile: Alliance Pharma Plc
Business: pharmaceutical giant'
Launched: 1996
Location: Chippenham, Wiltshire
Founder: John Dawson, CEO
Staff: Andrew Smith, Alliance's chairman
Financials: The pre-tax profits are up a whopping 103 per cent to £22.2m in the year to December while revenues rose 102 per cent to £97.5m.
Investment: Aim-listed
News: boosted its sales following its takeover of rival Sinclair's healthcare products. Alliance Pharma's takeover of Sinclair's products helped boost is profits and expand its geographic reach to over 100 countries. Other highlights included integrating 27 products acquired from Sinclair, effectively doubling the size of the group. Among its star products were scar gel Kelo-cote and eye supplement MacuShield. Kelo-cote became the pharma giant's first £10m brand last year.

PURE GYM: Budget fitness chain reveals sales growth | Joanna Bourke, The Evening Standard. March 30, 2017
DZ profile: Pure Gym Limited
Business: No-frills UK budget fitness chain which has more than 930,000 members. It plans to boost its 174-strong gym empire with new London branches in Colindale, Limehouse and Ilford. Britain’s biggest fitness chain. Low-cost operator with streamlined operations.
Launched: 2008
Location: Leeds
Founder: executive chairman Peter Roberts, the British entrepreneur and his co-investors who started the chain with four sites in 2009. 

Staff: chief executive Humphrey Cobbold, former boss of cycle gear retailer WIGGLE.
Financials: Revenue increase to £159.9m in 2016, from £125m a year earlier. Underlying profit was up 41% to £39.5m.
Investment: acquired a stake of about 80 per cent by US private equity backer, CCMP CAPITAL in 2013. The management hold a significant stake. Shareholders include Sir Chris Hoy, the Olympic cyclist

1. The boss of Pure Gym had hoped to raise £190m through an IPO, but axed the decision in October, blaming “market volatility”. On Thursday said he had no regrets about scrapping plans for a flotation last year, as he revealed a 28% sales surge at the business.
2. Bought LA Fitness for roughly £70m in 2015

Pure Gym sold to Leonard Green private equity house | Naomi Rovnick, FT. November 3, 2017.
3.US private equity group, LEONARD GREEN & PARTNERS, of Los Angeles bought majority ownership of Pure Gym - that values the business at £600m - from CCMP Capital, the British buyout house. People briefed on the transaction said the £600m price tag represented a valuation of about 10 times forecast earnings before interest, tax, depreciation and amortisation. Leonard Green already owns stakes in SOUL CYCLE, the indoor cycling chain with a cult following in New York and California, and PURE FITNESS in Asia, which is not related to Pure Gym. Its investment portfolio includes holdings in Sir Philip Green’s TOPSHOP empire, SHAKE SHACK, the US burger chain, and J CREW, the apparel retailer.

4. When CCMP bought its stake in 2013 as part of a fund that is now reaching the end of its life, the gym chain was valued at £140m. It now has 960,000 members and 189 sites. It has prospered with a marketing strategy that does not require clients to commit in advance to long-term memberships and generally charging less than £20 a month. 
PureGym posts profit as it breaks 1m membership barrier | Liam Kelly, The Sunday Times. May 12 2019

5. Britain’s biggest gym chain posted sales of £228.4m and pre-tax profits of £14.4m last year, compared with a £14.5m loss in 2017. It has 236 gyms, most of which occupy large sites of between 15,000 sq ft and 20,000 sq ft, with a further five to be opened soon.  ...its membership numbers rose above 1m for the first time
6. The company pulled plans for a float in 2016, citing unsuitable conditions.
7. Cobbold, 54, said PureGym planned to expand into smaller cities and market towns by opening gyms of about one-third of the size.