Crawley-based Acro Aircraft Seating,one of Britain’s leading aerospace design and engineering companies, has received a £7.75m growth capital investment from BGF.
Founded in 2007 by three industry professionals – Chris Brady, Andy Lawler and David Starkey- the company was set up to design and manufacture economy airline seats that were comfortable, maintainable, robust and lightweight in order take advantage of huge growth in the low cost carrier (LCC) market. The company’s first seat was launched in 2007 and a year later Acro was granted European Aviation Safety Agency (EASA) approval with Jet2.com becoming its first customer. The range has since expanded to include both fixed and reclining seats as well as a recently launched premium economy seat.
Acro is now a major player in the global market for economy aircraft seats. Each year the company manufactures around 25,000 seats at its 50,000 square foot facility next to Gatwick Airport, but has the capacity to significantly increase this figure. To date there are over 50,000 seats flying globally. The business now has more than 20 airline customers around the world including Thomas Cook, Frontier and Spirit Airlines and was ranked second in the 2015 Sunday Times SME Export Track. The company received the Queens Award for International Trade in 2015.
Acro believes that aircraft seats should be considered as furniture first and aircraft equipment second and puts passenger comfort at the heart of its designs. It believes that comfort is found in the spaces between the seats and works hard to make them both comfortable and anatomically correct, whilst being as slender as possible to create the maximum amount of legroom for the passenger. The innovative construction of its seats and in particular the composite materials used in the sculpted seatback provide correct support to the lower back and create additional legroom by keeping the seat structure out of the way of the passengers’ legs.
Under the leadership of CEO Chris Brady, Acro has enjoyed significant growth in recent years with revenues growing at a CAGR of 54 per cent since 2013 and, in the 12 months to January 2016, the business is expected to deliver revenues of £33m. Growth has been funded to date via cash flow.
After an apprenticeship at British Airways, Chris joined Virgin Atlantic in 1990 as an engineer, moving into a marketing role in 1993. In 1997 he became Managing Director of Reynard Aviation (a joint venture between Virgin and Reynard Racing) and led the team which manufactured Virgin’s first lie flat bed before becoming General Manager of Product Development responsible for innovation across the entire passenger experience.
In addition to retrofitting aircraft with seats, the ability to supply new aircraft significantly increases Acro’s potential market. The company was recently chosen as the preferred supplier for an order of 50 new Airbus aircraft by Spirit, an American low-cost carrier operating flights throughout the U.S. as well as the Caribbean, Mexico, and Latin America.
BGF’s capital will be used to invest in Acro’s design and product development capabilities, strengthen its supply chain and provide additional working capital to fund the company’s future order pipeline.
Acro operates in a fast growing market. Global passenger fleets are expected to more than double from circa. 16,000 aircraft today to around 34,000 by 2032. Single aisle aircraft are expected to generate the greatest demand of any aircraft type driven by growth in emerging markets and an increasing number of LCCs.
BGF has taken a minority stake in Acro and Ben Kirby, Investor, takes a seat on the company’s board on behalf of BGF. In addition, Bob Davies joined as Non-Executive Chairman following an introduction by BGF. Bob is currently Board Advisor to TriVista and an advisor to Wyvern Partners carrying out operational due diligence and improvement projects for private equity houses. He was previously Chairman of Manchester Solutions and CEO of Renold plc and Druck plc and has spent over 20 years in the Aerospace industry working for Lucas and GE.
TWO’S COMPANY: TIM CRITCHLEY AND DAVID SEAR OF SEMAFONE
It was common for the equity investors of yore to demand a complete overhaul of a management team as part of the terms of a fundraising deal. The received wisdom was that the people who had built up a company in the early days of its operation were rarely the right people to lead a much larger organisation. Luckily, some investors now take a more informed view.
In Semafone’s case, not only was chief executive Tim Critchley identified by us as precisely the right man to grow the secure payments business, but his choice of non-exec, David Sear, was also given the seal of approval.
It’s this kind of hands-off, respectful investor-investee relationship that gives other entrepreneurs the confidence to seek outside funding. The business is now in the best possible position to embark on its new contract with BT, one of the world’s largest telecoms companies, and to take Semafone to the next stage of growth.
Tim Critchley – CEO, Semafone
I first got involved with Semafone in 2009. The two founders, David Jackson and Charles Cooper-Driver, came to me with the idea and said they were thinking of setting up a business. I have known David and Charles for more than 20 years. We’d always talked about doing something together but they were busy running a big call centre business – one of the reasons they had the idea for the Semafone technology in the first place – and so they didn’t have time to run with it themselves. It seemed like a great idea and a great opportunity.
We got to a point where the business was making a small profit: we had over £5m turnover for the year and we were growing 35pc-40pc year on year. We had some great customers in the UK but almost by accident had started to win customers overseas: we were being reactive to enquiries through the website and had ended up with around six clients in North America and one in Australia. It was pretty clear to us that we were sitting on a potential global opportunity.
We were keen to try to capitalise on that with external investment. We wanted to get some bodies on the ground overseas, and set up a North America sales team and one in Asia Pacific to go out and be proactive in those regions. We also had just signed a major deal here in the UK with BT, and we realised that it was going to need quite an investment from us to really deliver.
During the process of seeking funding, BGF was head and shoulders above everyone else, really. Its interest in us was exciting; it could help not only with money but also with support and a strong business network.
Bringing BGF into the company has changed the dynamic, but that is as much of a reflection of our development than anything else – we realised we had to grow up a bit and the governance changes that BGF has brought in would have happened anyway, so it worked out really well.
We got David involved about three years ago, before BGF’s investment, as non-executive chairman. I’m delighted to say that BGF felt that he was the right chairman for us and that the relationship he and I had was a strength – so they didn’t feel a need to replace him. I was really pleased that they were happy for David to stay on.
David’s got a fantastic track record and is incredibly knowledgeable in the payments sector, and he’s also a very smart bloke. David and I have forged a great relationship over the years – we’ve done some big contract negotiations and fundraising, and we’ve also had to grapple with litigation over patent infringement. David’s experience has been a huge help in all of that. It is a formal relationship, but that works for us – and the business.
David Sear – non-executive chairman, Semafone
I’ve got 20 years’ experience in payments, and I’m a serial investor in payments companies, so I know the space very well. Three years ago I was approached by a third party in relation to Semafone when it was at a relatively early stage of its development.
It piqued my interest because this is a business with a vital role in protecting consumers and their data. These are really important things to consumers – people want to feel secure when giving out card details over the phone.
This was a business with strong technical capability, and scope for further development in secure payments. It was exciting from an intellectual and investment point of view. Early on, I put my money where my mouth was and invested in the business, and it paid off as the business has since made significant progress.
You wouldn’t invest in a business unless you strongly believed in the people, and that always comes down to the CEO. If you don’t think they can grow with the business, you really shouldn’t invest.
My assessment of Tim when I came in as chairman and investor was that he has a lot of energy, and that he was definitely capable of running the business as it became bigger. I also thought that with my experience – I run Skrill Group, which is a €250m (£179m) business – I could help him as a chairman and create the kind of board that the business needs.
Tim had so much potential, and he has become a mature player as he’s dealt with the challenges that you face in business – making sure you make the payroll, and all those other wonderful things you have to deal with as CEO. Tim is one of those guys who soaks up pressure too, with grace.
I’ve tried to help Tim with strategy and coaching himself in terms of what he can do, but all the time without trying to run the business for him. I understand, having been a CEO myself, the real difference between executive and non-executive: he’s firmly in the seat, he just needs the right kind of advice and support from his board, when he asks for it.
The fantastic opportunity with BT is going to be the next massive step change in the business. You can’t underestimate how important that kind of deal is. But there is an investment required in managing big partners such as BT, and so we knew we needed to go to market and raise money last year.
We were looking for a complementary shareholder and BGF came through the process fantastically. When you get to this kind of stage you benefit from a fresh look at the business and its governance. It has been very firm in its views, but very nice to work with. It is good to have such a direct and clear relationship with a supportive investor.
In March 2015, BGF invested £3.75m of growth capital in British menswear brand Oliver Sweeney.
Led by an obsession for footwear that has fuelled the brand’s expansion, Oliver Sweeney has become a British menswear success story, manufacturing and selling shoes, clothing and accessories that are an ingenious take on traditional craftsmanship. With a passionate team in London and a factory of craftsmen in the Italian Marche, the brand’s signature blend of contemporary design, skilled manufacturing and superlative customer service has resulted in an obsessive customer base of stylish men searching for something different.
The business was founded in 1989 and was bought by its current owners Maurice Helfgott and Amery Capital in 2009. Amery has a focus on investment in retail and consumer related businesses.
The investment will be a significant boost to Oliver Sweeney, and will enable amongst other things a new marketing strategy as well as the introduction of Licensing as a principal channel.
Oliver Sweeney operates six standalone retail stores in the UK (four in central London, and one each in Manchester and Leeds), as well as the growing e-commerce site oliversweeney.com, and employs 60 staff.
CEO Tim Cooper is the brand’s Cobbler-in-Chief, and has been a footwear industry leader for over 30 years. Chairman Maurice Helfgott, who introduced the deal to BGF, is Chairman of Amery Capital, and currently sits on the board of Moss Bros plc and as well as being a former Main Board Director of Marks & Spencer.
As a part of the investment, Investment Director Alistair Brew joined the Oliver Sweeney Board as Non-Executive Director, and Adam Leigh, who successfully led and sold The Communications Agency, joined as Independent Non-Executive Director.
BGF continued to back the UK’s innovative print sector when it invested £5.3m in Sussex-headquartered Pureprint Group in December 2014. BGF’s investment is supporting organic growth, further investment in its market-leading technology and providing the financial means for future acquisitions. BGF invested equity finance in Pureprint for a minority stake in the business.
Pureprint has experienced rapid growth in recent years, with revenue growing from £17m in 2009 to over £40m in the financial year ending December 2014. Based in Uckfield and founded in 1926 by the grandfather of current chief executive Mark Handford, the company provides lithographic and digital printing as well as packaging and outsourcing services, with a focus on quality, service and environmental sustainability. Its roster of over 300 clients includes many premium brands including Mulberry, Victoria Beckham, NetJets and Vertu, more than 50 FTSE 100 companies including Rolls Royce and BP, and charities including Fairtrade and Oxfam. Pureprint is also internationally renowned for producing fine art books and catalogues and clients include Gagosian Gallery and Sotheby’s in New York and London. The company currently employs 275 staff.
Pureprint was the first printer in the world to be awarded CarbonNeutral status in 2002 and sustainability is central to the company’s offering. The business has won a number of awards including the Queen’s Award for Enterprise: Sustainable Development in 2003, 2008 and 2013.
Mark Handford and his sister Bridget Massey, HR director, remained as majority shareholders following BGF’s investment. Handford appointed Andy Nash, introduced by BGF, as non-executive chairman. Following an extensive career in FMCG marketing, Nash is also Chairman of Brand Addition and ICA Digital. Jon Simon, senior investment manager at BGF, joined the board as non-executive director.
Boutique gym chain GYMBOX is set to expand in London and across the country with a £10m investment of growth capital from BGF.
GYMBOX currently has 5 clubs across the capital and will use BGF’s capital to continue its site roll-out in London with three additional sites already secured. Beyond these, GYMBOX now has the funding in place to open several further gyms in London, and in other UK cities.
Recently voted by Cool Brands Expert Council as a leading UK Brand, the gym chain has become an essential place for fitness-savvy Londoners by combining vibrant interior design with its unique take on exercise.
Founded in 2001 by Richard Hilton, GYMBOX opened its first gym in Holborn in September 2003 and today has clubs in Farringdon, Covent Garden, Bank and Westfield. The company is expected to turnover £10m, with an EBITDA of £3.5m in the year ending October 2014 and currently has 13,400 members. Richard, previously a marketing executive who worked on developing and building successful brands for Nike and Unilever among others, saw the gap in the UK market by observing the success of similarly differentiated brands in the USA.
Richard Hilton, Managing Director of GYMBOX said:
“This is an exciting announcement for us and we are delighted to be working with BGF as we look to the next stage of our growth. The GYMBOX brand has gone from strength to strength in recent years based on our contemporary club designs, exciting and original classes and our ability to offer customers new and unique ways of keeping fit. We look forward to opening new sites this year and next and introducing the GYMBOX concept to a wider audience in London and other UK cities.”
Alistair Brew, Investment Director for BGF commented:
“We saw this as a fantastic opportunity to back an ambitious and proven management team in the roll-out of a successful and differentiated gym business which has had impressive success to date. Richard is a driven and committed entrepreneur whose track record of site selection, which is key in roll-out programmes of any nature, has been outstanding. The business has consistently hit its financial targets and we are delighted to be partnering at this stage of GYMBOX’s exciting development.”
Paul Campbell who is Chairman of the Hawksmoor steak restaurant chain, former founder and CEO of The Clapham House Group plc, joins the board as Non-Executive Chairman. Paul’s experience of leisure roll-outs will prove invaluable as GYMBOX expands. Following BGF’s £10m investment for a minority stake in the business, Investment Director Alistair Brew will join GYMBOX’s board as BGF’s representative.
The UK gym market was valued at £3.92bn in 2013 (source: The Leisure Database Company) with a growing trend whereby more nimble low-cost gyms are increasingly taking market share from mid-market operators. At the other end of the scale, upmarket gyms continue to be able to attract members with GYMBOX able to benefit from its unique positioning. GYMBOX represents BGF’s second investment in the UK fitness market having backed low-cost gym group Xercise4Less in August 2013 which now has 23 gyms nationwide.
GYMBOX is banked by HSBC and was introduced to BGF by Investment Director Alistair Brew who has known Richard and the GYMBOX business for several years having previously successfully backed them at another firm.
Alistair joined BGF in July 2011 and is based in London. His main role is to identify and successfully execute investments. He also sits on the board of a number of our portfolio companies.
Alistair has 14 years’ experience in small company investing and has led investments into over 25 businesses. His investment experience was gained initially at Close Brothers and then at Octopus Ventures, where he was involved in a large number of growth capital and management buyout transactions, across multiple sectors and throughout the UK. In the majority of cases, Alistair also joined the board of those companies. Alistair began his career at Price Waterhouse with direct entry into the Business Recovery Services team.
Alistair has an MA in Modern History from Oxford University and is a qualified Chartered Accountant. He is married with three children and lives near Guildford. When he is not running around after his children, Alistair likes to play (or increasingly now settle for watching) cricket.
“What excites me most about my role at BGF is the privilege of interacting with a wide variety of entrepreneurs, and I try to bring the same passion they display into my own efforts to support a portfolio company’s growth.”
- Acro Aircraft Seating
- Oliver Sweeney (Board Director)
- Gymbox (Board Director)
- The Consulting Consortium
- Peyton and Byrne (Board Director)
- Cennox (Board Director)
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