Thinking of buying out a non-core business of a larger Group?

25 July 2019

Dan Freed
Partner, YFM Equity Partners

For a variety of reasons, good businesses sometimes fail to fulfil their potential when part of a larger corporate structure. It may be that it is no longer deemed to be of strategic importance and cash generated (from ongoing operations or a disposal of the business) is re-invested in other “more attractive” parts of the group. Or it may have suffered from a lack of stakeholder attention and support and not progressed as well as it perhaps should have. Ultimately, there could be a better owner of the business to back its future growth – and that is often the senior management team, who understand its competitive position, the market it operates in and the critical success factors for a growing profitable business.

Why would a management team want to buy out a business?

Simply put, they see the opportunity for significant future value creation. They know and understand the company – its strengths and opportunities – and, under new ownership, a good business should have the focus and resources needed to accelerate its strategic development. This can result in faster turnover growth, job creation and increased employee engagement.

What are the issues to consider along the journey?

Firstly, proper preparation for the process is important. As with any transaction, a business plan clearly articulating the growth prospects will be needed. A carve-out deal out will also require standalone financial information, which could be a detailed exercise. Here are a few other questions:

  • Are all the key customer contracts in the name of the subsidiary to be acquired?
  • Are colleagues all employed by the subsidiary to be acquired? Do some people split their time between the business and the Group – will they be included in the transaction or not?
  • How simple, or otherwise, will it be to separate the business from the larger organisation? Are there any functions provided centrally – finance, IT, insurance, property (to name a few).
  • Doesn’t managing the business and wanting to buy it create a conflict of interest? Acting as both sellers and buyers is not without its challenges, but this is a well-trodden path and advisers on management buyout transactions are well-versed in navigating through the process.

What are the options to fund the acquisition of the business?

Management teams are unlikely to have the personal financial resources to acquire the business in full. Typically, alongside an appropriate level of participation from the team, funding can be raised from one or more of the following sources:

  • Bank debt
  • Loan notes from the vendors
  • Private equity

There are many success stories of thriving businesses that were previously a non-core part of a larger structure, particularly when private equity has supported the management buyout team. YFM has spent over 35 years investing in UK businesses and continues to work in partnership with management teams looking to deliver stakeholder value, for example Leengate Valves and President Engineering.

 

 

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YFM completes £230m of deals and raises £100m of new funds in H1 2019

01 July 2019

UK’s smaller businesses continue to invest for growth

During the first half of 2019 YFM Equity Partners (YFM) completed £230m of deals and raised £100m of new funds.  This result represents a sharp increase on 2018 and reflects the resilience and positivity of smaller businesses and demonstrate that this sector is bucking some of the perceived business trends.

The results demonstrate that the UK’s smaller businesses are continuing to innovate and invest for growth, despite the ongoing backdrop of continued political uncertainty on both domestic and international levels.

This market could have performed better, but given the on-going activities in Westminster, the performance levels are understandable. This time last year there was a general belief that we’d have some form of agreement on how the UK was going to extricate itself from the EU, but scepticism over what the shape of that might be meant the period of uncertainty lasted longer than expected. Nonetheless investment rates in the first half of the year for YFM were pretty solid.

Whilst debate shifted from “how” to “who” and “if “ we’ve seen investment rates climb by over 50% on 2018 levels. At the same time investor appetite for UK smaller businesses remains undaunted which has seen YFM raise £100m in the first half of the year.

David Hall, Managing Director at YFM said; “Overall returns, both realised and unrealised have remained steady. There’s been a healthy appetite for YFM’s assets from both trade, overseas and UK investors, as well as from UK private equity houses. This has translated into positive returns and more importantly distributions to investors who are largely individuals, rather than institutions”.

“Against a background of low interest rates and returns, YFM’s strong performance has whetted investor appetite which remains strong and it is clear they remain committed to invest in this sector of the market.”

YFM has seen increasing levels of opportunity over the last few years and 2019 has shown a stepped increase on 2018. There are several common characteristics that these businesses share; they are generally younger, typically less than 10-15 years old.   In addition, they are either undertaking a management change/refresh which brings a new injection of ideas and energy or have a proposition that improves their customers’ businesses by making them more efficient, working smarter or builds an extra robustness.

Hall added; “Whilst these businesses may be small they tend to have an international outlook and customer base. Their delivery systems lend themselves to being able to scale rapidly and respond to market changes irrespective of geographical boundaries.

“However, there are some businesses which have more technical and complex products where they are mission-critical, protecting data being a prime example.  These have longer sales cycles and arguably more contractual longevity with their customers, but perhaps can’t scale as rapidly needing bigger sales forces to meet the customer’s buying needs.

“One area that is surprising by its absence is the premium/advanced engineering sector. This is an area of traditional UK strength, but investment in and enquiries from this sector don’t seem to have been as strong. If I could wave a wand I’d like to see this area represented as well as in the recent past.”

YFM invests in UK-based smaller businesses, none of which are listed, and their investments cover the length and breadth of the UK through its network of regional offices as well as its hub in London.

 

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YFM Equity Partners announces £60m first close of its Buy-Out Fund II

20 June 2019

YFM Equity Partners (YFM) announces the first close of its Buy-Out-Fund II with £60m of investment committed.  This follows the £45m raised for its Buy-Out Fund I, which had a final close in April 2017.  Only two years later, and following the recent investment in THE PROTEIN WORKS, this fund is now almost two thirds invested.

“Nearly three quarters of the funds have been raised for our Buy-Out Fund II from existing investors, which is a great endorsement from our investor base, with over £15m from new investors” said Mike White YFM’s Partner responsible for Investor Relations.

YFM’s strategy is to raise funds that are invested over 2-3 years. This gives investors shorter commitment periods allowing them to re-invest with YFM over shorter cycles. “This is something we learnt investors found attractive when raising the first fund.” added White.

Buy-Out Fund II will continue the investment strategy established by the first fund where typically YFM invests between £3-7m through its UK footprint of offices into businesses where there is a change of ownership and strong growth potential.  The strategy for Buy-Out Fund II will be to hold second and final closes before the end of 2019 and the fund will invest over a similar period to Buy-Out I, investing into 2022.

White goes on to say, “What we have found most interesting is the funds have all been raised from within the UK with all our new investors being individuals, family offices or high net worth investors. Most of these investors have generated their wealth as owner managers in the UK small business sector which has given them enormous empathy and a strong understanding of what we do and the businesses we invest in.”

David Hall, Managing Partner added “We believe the market for these smaller businesses is less well served which has been demonstrated by the success of our Buy-Out Fund I which is nearly fully deployed just two years after its final close. In addition, we realised one of our investments at the end of 2018, delivering a 4.2x return which shows there is real and tangible value in this market.

“There’s been a strong investor appetite in both our Buy-Out-Funds which has seen YFM raise over £100m in addition to the £35m invested in our growth funds. This provides us with powerful investment capacity to support and invest in the UK’s small businesses with funds under management now exceeding £300m.

“We are targeting a fund size of £75m so as to have a manageable portfolio and it is very encouraging to have such a strong first close”.

 

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BSC2 wins at the AIC Shareholder Communications Awards 2019

17 June 2019

British Smaller Companies VCT2 plc (BSC2), one of the VCTs advised by YFM, has again won the prestigious award for Best Report and Accounts – VCT at the AIC’s Shareholder Communication Awards.

Roger McDowell, a director of BSC2, commented: “It is an honour to receive this award which reflects how seriously the trust and YFM takes its investor communications and is a testament to the work of YFM’s fund reporting team.”

Read more about the awards here.

 

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Helen Villiers joins YFM

13 June 2019

YFM Equity Partners (YFM) has today announced the appointment of Helen Villiers as Investment Manager. Based in the London office, Helen will be focussing on supporting YFM’s new investment activity, working with the existing team to deploy funds into growing businesses at points of transformational change.

Helen’s appointment comes at a time of significant activity for YFM, with investments in The Protein Works from its Buyout Fund 1, marking the eighth investment from the fund, as well as recent scale up capital investments in Frescobol Carioca, Elucidat, Wooshi and Tonkotsu from its two advised VCTs.

Helen, a qualified chartered accountant, joins from Grant Thornton’s Corporate Finance team in London, where she worked closely with management teams and entrepreneurs on a range of transactions, primarily in the Human Capital and TMT sectors.

Colin Granger, Partner at YFM said: “Helen is an important addition to the team at YFM.  We are experiencing increasing levels of opportunity to provide funding to UK based companies, particularly in our core investment range of £2-10m.  Helen’s experience in the market will be invaluable as we look to scale further in the future.”

Helen Villiers added: “I am delighted to be joining YFM at an exciting time and I’m looking forward to working with the YFM team to meet interesting businesses and ultimately to back dynamic, ambitious founders, entrepreneurs and management teams to transform and grow their companies.”

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Tonkotsu partners with YFM for next phase of growth

11 June 2019

Tonkotsu, the Emma Reynolds and Ken Yamada-founded ramen restaurant group plans expansion after partnering with investment firm YFM Equity Partners (“YFM”)

The group, which is led by Managing Director, Stephen Evans, operates nine restaurants in London and one in Selfridges Birmingham, with two more due to open later this year in Peckham and Shoreditch.

Reynolds and Yamada continue to be involved in the business, and Yamada says, “this partnership will allow us to grow our business, enabling us to open a handful more Tonkotsus. Our commitment to the quality of our food, our homemade noodles and the way we treat our people, who are the heart of this business, has been fundamental from day one. We chose YFM as our partner as we felt they shared our ambition to grow the business in the right way to maintain the culture and the brand”.

Entrepreneur and Dragon’s Den star Sarah Willingham, formerly of Pizza Express and Bombay Bicycle Club, will Chair the business. She says, “Tonkotsu’s ramen is the best I have ever tasted, and I’ve been a huge fan for many years. I love the culture and look forward to working with Emma, Ken and the highly-motivated management team, led by Stephen.”

Stephen Evans added “the casual dining sector is experiencing some well documented issues, but the partnership with YFM is proof that well-run brands, with a distinct and value-led offering, continue to attract investment. This is an exciting time for us, our financial performance over the last 12 months has been strong, and this additional investment from YFM will allow us to continue to grow and bring our ramen to a greater audience”.

Funds advised by YFM the specialist private equity fund manager are investing £5M in Tonkotsu for a minority stake.  YFM has a track record of backing businesses across all sectors in the UK. Mike Clarke and Jamie Roberts led the investment for YFM. Mike Clarke commented:

“The team have done a fantastic job in building the company, a unique brand and a loyal customer base despite real challenges to the restaurant sector. We are delighted to be working with Tonkotsu to support their continued growth over the coming years.”  YFM’s has other investments in the consumer market including Friska and Frescobol Carioca and YFM’s previous investments in the sector include – Go Outdoors and Gill Marine.

YFM’s legal advice was provided by Jon Gill at TLT LLP, Organisational Review by Anna Cornwallis of Stratton HR, Tax structuring by Phil Snell of James Cowper Kreston and Financial Due Diligence by Stephen Reed of Price Bailey.

Will Baxter, DSW and Grant Thornton acted as lead advisor to Tonkotsu, and Tim Bird of Field Fisher provided legal advice.

 

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YFM Equity Partners invests £3.6m to support the growth of Wooshii

10 June 2019

Funds advised by YFM Equity Partners (“YFM”), the specialist private equity fund manager, have backed a £3.6m investment into Wooshii Limited (“Wooshii”), a disruptive video agency. YFM’s investment comes from its two advised VCTs, British Smaller Companies VCT plc and British Smaller Companies VCT2 plc.

Wooshii, founded and led by Fergus Dyer-Smith, was built to capitalise on the increasing demand for fast-turnaround digital content, offering clients the convenience and quality of a traditional video marketing agency paired with a decentralised, global creative network. The result is the ability to provide clients with a video content solution that scales with their needs, with feet on the ground across the globe, making localised video content production faster and more affordable.

Growth in recent years has been impressive, and today Wooshii works with a number of blue chip corporate clients including Coca-Cola, Microsoft and Booking.com.

YFM’s investment will be used to support the continued growth of the business, with Wooshii planning to strengthen its team in the UK, the US and across Europe. These newly created roles will enable the business to further expand its international footprint and client base, and to further develop its technology platform.

Colin Granger and Adam Hart led the investment for YFM.  Colin Granger will join the board of Wooshii at completion and commented: “Wooshii have successfully built a decentralised video production model that solves the key issues facing corporates today with a growing demand for content across a global market. We’ve been hugely impressed with management’s vision and the quality creative network and technology platform that the business has created. Having a solid platform, international reach with the opportunity to scale, it’s the type of early-stage, high growth business we look to support, and we’re excited to be part of the Wooshii journey as it continues to gather momentum.”

Fergus Dyer-Smith, founder and CEO of Wooshii, added:

“It’s a really exciting time for Wooshii, and the funding from YFM will allow the business to capitalise on the huge opportunity that lies ahead. We selected YFM as a partner given their knowledge of our market as well as having supported numerous businesses like Wooshii through this planned phase of growth. We have built a great relationship with Colin and Adam during the process and have enjoyed their straight-forward and pragmatic approach. We’re delighted to have YFM join the team.”

YFM’s legal advice was provided by Chris Reed and Poppy Wilkinson at Gateley Plc, Commercial Due Diligence by Geoff Rampton and Suzy Urch of RPL Ltd, Financial Due Diligence by Robert Ledger, Organisational Review by Anna Cornwallis of Stratton HR and IT Due Diligence by John Dowell of Turous.

Dane Phillips of NOR Capital acted as financial advisor to Wooshii with Sam Mabon of Brabners providing legal advice.

 

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YFM leads the buy-out of The Protein Works

7 June 2019

YFM Equity Partners leads the buy-out of  THE PROTEIN WORKSTM with a £6m investment from its Buyout Fund I

YFM Equity Partners (“YFM”), the specialist private equity fund manager has backed the MBO of THE PROTEIN WORKSTM from B&B Investment Partners

Dan Freed and Andy Thomas lead the investment for YFM and this announcement marks the 8th investment from YFM’s Buyout Fund I taking it past 65% invested.

Founded in 2012, THE PROTEIN WORKS™ is a direct-to-consumer sports nutrition business that sells a wide range of protein powders, snacks, supplements, and foods, manufactured at their 34,000 square foot facility in Runcorn, Cheshire. The business has won several awards including New Business of the Year 2014 at the National Business Awards.

Consumers in the UK and the EU can buy directly from THE PROTEIN WORKS™ through their website, and the business sells to markets across the globe via a network of international distributors. The company has enjoyed a sustained period of growth, buoyed by the development of a leading vegan range, unique snacks from its in-house protein bakery and best of breed flavours. It now expects to reach £13 million of sales this year.

The business is run by CEO Mark Coxhead, who co-founded the business, and Marketing Director Laura Keir. As part of the transaction, Arvin Ghoora will join the business as Finance Director. The team plan to make further board appointments in the coming months as the business gears up for further growth.

Andy Thomas, Partner at YFM commented:

THE PROTEIN WORKS™ is ideally placed to serve customers seeking to make protein and other healthy supplements part of their everyday lifestyle. The team have developed an exciting proposition that consumers can trust, and we’re looking forward to working with them to grow the brand, both in the UK and globally. YFM is delighted to be part of THE PROTEIN WORKS™ team”.     

Mark Coxhead, co-founder and Managing Director added:

“It’s a very exciting time at THE PROTEIN WORKS™ as we embark on a new phase of expansion. The brand’s premium range of products have been well received in diverse markets and cultures around the world, illustrating its incredible potential. Partnering with YFM will help us to make this unique brand truly global and give millions more the opportunity to snack healthy on everything from Protein Crunkies to Loaded Nut Butters.”

Sam Davies, Corporate Finance Director at Cowgills advised YFM and its management said, “Mark and his team have rapidly built TPW into a leading premium sports nutrition brand, the partnership with YFM matches the team’s growth ambitions. The management team met a number of equity partners but had a strong cultural fit with YFM which has an excellent track record supporting MBOs and consumer sector deals. The team have been a pleasure to work with and we look forward to continuing to support them as an independent business”.

Sam Davies of Cowgills provided corporate finance advice for the acquisition. YFM’s legal advice was provided by Mark Winthorpe and Andy Walsh at Pannone Corporate. Financial Due Diligence was undertaken by Iain White of DSG, and Commercial Due diligence by White Cap Consulting. OneFourZero undertook Digital Due Diligence, and Marsh completed Insurance DD. Will Munday of DWF provided legal advice to the management team. Paul Satchell of Spayne Lindsay and Crispin Bridges Webb and Gareth Cook of Shoosmiths advised the vendors.

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YFM backed Matillion raises $35 million

5 June 2019

YFM-Backed Matillion raises $35 million in series C Round to further advance its leadership in data transformation in the cloud

Investment led by Battery Ventures will fuel continued rapid expansion and new products in response to strong market demand

Denver, Colo. and Manchester, England – June 4, 2019 – Matillion, the leading provider of data transformation software for cloud data warehouses (CDWs), today announced a $35 million round of funding.

The investment will allow Matillion to capitalize on its leading category position while continuing to deliver accelerated growth, and extend the capabilities of its flagship product line, Matillion ETL. Following the $5m series A investment led by YFM  this latest round led by Battery Ventures, brings Matillion’s total funding to-date to $65 million. Series B  investors, Sapphire Ventures and Scale Venture Partners also participated.

Continued strong demand for Matillion’s data transformation software, purpose-built for the cloud, led the company to deliver triple-digit revenue growth in 2018 for the third consecutive year. The new investment, based on Matillion’s sustained success, accelerates the company’s expansion both within and well beyond its native-built solutions for CDWs.

“It’s our view that every company in the world needs to compete using data,” said Matthew Scullion, CEO at Matillion. “And most of the time they’ll do this in the cloud. Only the cloud offers the speed, agility, power, and economics to cope with this demand for data insights, and to manage the exponentially growing data volumes and complexities that we work with today. As the leader in purpose-built data transformation software for cloud data warehouses, Matillion is perfectly positioned to help our customers compete and win using data. That’s why we’re so excited to raise this round, partner with the great team at Battery Ventures, and to once again accelerate our business and the development of our current and future products.”

“Matillion has built an innovative, cloud-native, data-middleware product from the ground up, and the company partners with some of the fastest-growing cloud-data warehousing platforms that enterprises are deploying today,” said David Hall, managing  partner at YFM Equity Partners. “As enterprise IT shifts to the cloud, and the ability to analyze data underpins the digital-transformation process at all companies it is a testament to Matillion’s progress in this market that it has attracted not only further investment but  added depth and capacity to its shareholder base”

“Matillion has established itself as an essential component to the modern enterprise’s data analytics tech stack,” said Denise Persson, CMO at Snowflake. “Our shared focus on innovation has made us great partners, and this latest investment reinforces Matillion’s leadership in cloud-native solutions for data transformation. We’re excited to see them continue their growth trajectory as they advance their industry-leading technology to serve our joint customers.”

Matillion’s software empowers customers to extract data from a wide number of sources, load it into their chosen cloud data warehouse, and transform that data from its siloed source state, into useful, joined together, analytics-ready data – ready to be consumed in analytics, machine learning and artificial intelligence use cases. Purpose-built for the cloud, Matillion does this at scale, delivering fast time to value, high performance with pay-as-you-drink economics – simplicity, speed, scale, and savings.

Matillion’s software is used by more than 550 customers across 40 countries, including global companies like Bose, GE, Siemens, Fox and Accenture, as well as high growth, data-centric companies like Vistaprint, Splunk, and Zapier.

 

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YFM Equity Partners backs the growth of e-learning specialist Elucidat with £3.5m investment

21 May 2019

Funds advised by YFM Equity Partners (“YFM”), the specialist private equity fund manager have backed an investment into Elucidat Limited, an e-learning software business.

The £3.5million investment from YFM’s advised funds will be used to accelerate product development so that Elucidat’s customers can produce learning content faster and at a higher quality. The funds will also be used to invest in their team and drive growth in North America, which currently accounts for 35% of Elucidat’s revenue.

Elucidat is a learning technology SaaS business that offers smarter, faster ways for global organisations to produce, distribute and measure e-learning that delivers transformative impact. Based in Brighton, Elucidat was founded in 2013 by Ian Budden, Simon Greany and Steve Penfold (CEO). Growing rapidly since inception, the company has attracted big brand customers and world class training providers such as Tesco, The National Trust and the Open University. So far, over 10 million people around the world have benefited from learning opportunities created with Elucidat.

YFM’s investment comes from its two advised VCTs, British Smaller Companies VCT plc and British Smaller Companies VCT2 plc.

Nigel Owens, Investment Director led the Investment for YFM said: “The Elucidat team have already gained well known global brands as customers and the business is growing strongly.  We’re absolutely delighted to be working with the team at Elucidat to support the development of future products and further expansion into global markets”

Paul Cannings, Partner YFM added: “Elucidat is a great example of an organisation which not only has strong growth potential, but also seeks to do business in a responsible way. We are delighted to be able to support them in the acceleration of their growth plans.”

Steve Penfold, CEO of Elucidat, said: “This investment marks an exciting milestone for the Elucidat team and our customers. We’re now able to move even faster on our mission to help our customers around the world produce, distribute and measure transformational e-learning with real impact. For our team and the Brighton economy it means new job opportunities and even more focus on creating an amazing place to work, that centres around our ‘learn, care, share’ values.

“We selected YFM as our investment partner based their proven track record of working with businesses to accelerate global growth, whilst ensuring their portfolio companies consider their impact on society and the environment. We’re excited to be working together with YFM on the next phase of our growth.”

YFM’s legal advice was provided by Karen Procter of Shoosmiths plc, Financial Due Diligence carried out by Wilkins Kennedy, and organisational due diligence by Anna Cornwallis from Stratton HR. Jon Gill at TLT provided legal advice for the company.

 

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3 Reasons Why Private Equity Loves to Subscribe

18 April 2019

Mike Clarke
Investment Director, YFM Equity Partners

Ask anyone in private equity what they look for in a new investment. A strong management team and a growing market are a given, but then you will hear something along the lines of recurring revenue, contracted income or a subscription model.

These are attractive business models – once a customer is signed up, the hard work is done and when they want to move on, more often than not, it proves to be more of a hassle to cancel or change provider than it is to move to a new one. There’s nothing new in it, we have all signed up to a 12-month gym membership in January with the best intentions, only to fall back into bad habits in February.

But the subscription model has become fashionable of late with buzzwords like ‘SaaS’ and ‘disruptive technology’ being thrown around the board room like David Brent on overdrive. Outside of the tech sector, all parts of the market have taken note and now there are all kinds of quirky subscriptions, such as vegetable boxes delivered to your front door and different tea bags through the post. In the menswear and male grooming markets, the appeal of simplicity and not having to go to the shops has proven popular for normally mundane everyday items such as razors, socks and underwear.

Even routine services we have been using for years such as window cleaning and taxis are being marketed as a monthly subscription with no upfront fee! Uber is now looking to charge users in America $15 a month for a ‘ride pass’ which offers discounted fares. It feels as though the success of Amazon Prime, Netflix and Spotify have made paying small monthly subscriptions appear acceptable and just something we all now do.

It is true that typically, companies with recurring revenue models are valued much higher than companies without a subscription model but it is equally important to demonstrate a captive base of customers paying monthly fees with low levels of attrition after the trial period or honeymoon phase. Here are the top three reasons private equity love to subscribe:

Risk is reduced

A predictable revenue stream allows subscription-based businesses to make decisions and invest for growth, particularly in the current uncertain economic climate.

Subscription-based businesses disrupt the market with lower up-front costs and greater flexibility. Whilst all companies are vulnerable to losing customers to their competitors, it takes an aggressive and strong offering to steal market share in a subscription environment.

You get closer to the customer

Subscription models have much better visibility of the customer from their ongoing monthly interactions which should, by definition, mean a keen insight into the needs of customers and a better-quality service. The customer has the added benefit of spreading the cost and convenience.

There are loads of stats

Whilst profit is the main goal of any successful enterprise and we love to talk about EBITDA, it can be a very poor indicator of the value of a growing business, particularly a subscription business in the early stage of growth.

A high operating profit in a growing business could be a signal that the company is not keeping pace with sales and marketing spend or the need for continued improvement of its proposition to stay ahead of the crowd. The metrics that matter most to subscription businesses, are more likely to be annual recurring revenue, lifetime customer value, churn and acquisition cost and these can invariably be tracked in real-time providing critical management information.

So….recurring revenue models are not a panacea.  But they can create very successful businesses which attract high valuations if they can be scaled successfully.  Just what private equity investors are looking for!

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YFM backs Frescobol Carioca

26 March 2019

YFM Equity Partners supports significant investment into Frescobol Carioca, the luxury men’s resort wear and lifestyle brand

Funds advised and managed by YFM Equity Partners (“YFM”), the specialist private equity fund manager have backed a significant investment into Frescobol Carioca Limited (“Frescobol”).

YFM’s investment comes from its two advised VCTs, British Smaller Companies VCT plc and British Smaller Companies VCT2 plc.

Founded in 2013 as the brainchild of friends Harry Brantly and Max Leese, Frescobol’s roots lie in their Brazilian heritage and travel experiences which are reflected in a range of luxury men’s swimming trunks and resort wear that references and brings to life the Rio beach lifestyle.  Growth in recent years has been rapid, now with over 200 stockists in the world’s most exclusive boutiques including Harrods, Mr Porter, Matches & the One & Only resorts, bespoke collaborations with major luxury resort operators such as Aman Resorts, three retail locations and growing online sales to a global customer base.

YFM’s funds will be used to support the continued growth of the business, especially focussing on furthering the global customer base, developing ecommerce opportunities and investing in additional resource to build on the brand’s growing reputation.

Charlie Robinson and Adam Hart led the investment for YFM.  Adam Hart commented:

“Harry and Max have done a fantastic job in building a leading brand in the sector from a standing start in a very short space of time.  Their vision for the business is exciting and we look forward to bringing our experience in supporting young fast growth companies to deliver the next phase of development of the company.  We are particularly attracted by the global appeal of the products and believe Frescobol taps into an increasing interest in luxury travel and lifestyle.  We are excited to be part of the Frescobol team.”

Harry Brantly, co-founder of Frescobol, added:

“Max and I are delighted to have YFM on board for this next stage in our growth. Their track record in supporting SMEs is stellar and throughout the process we have felt a strong sense of collaboration and genuine desire to do what is best for the future of the brand. We look forward to sharing the journey with YFM with particular thanks to our YFM team Charlie Robinson, Paul Cannings and Adam Hart.”

YFM’s legal advice was provided by Nina Searle at TLT LLP, Digital Due Diligence by Becky Jasper of more2, and Organisational Review by Anna Cornwallis of Stratton HR.

Andrew Jakins and James Black of Highstead acted as financial advisors to Frescobol Carioca, and Patrick Martin of PTM Law provided legal advice.

 

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