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.
Zone, the award winning London-based digital marketing agency is preparing for significant expansion thanks to a £6m investment of equity finance from BGF.
In January 2015, BGF took a minority stake in Zone which also has operations in Bristol, Berlin and Köln and employs over 180 staff across its four offices. The agency uses its industry-leading blend of content and technology to help brands communicate in a digital world.
BGF’s £6m growth capital investment will support the company in making a number of UK and European acquisitions, a number of which have already been identified.
Zone’s clients include Coca-Cola, Barratt Homes, Tesco and BT. The company has worked on high profile campaigns including Coca Cola’s Share A Coke, Tesco Eat Happy initiative and the launch of BT Sport.
Voted by marketing industry experts The Drum as 2014’s Independent Agency of the Year, Zone was founded in 2000 by CEO, James Freedman.
A quarter of Zone’s team are editorial experts with strong journalistic backgrounds, and blending these skills of storytelling with technical expertise allows differentiates them from other agencies and enables them to develop digital strategies and products for some of the world’s best organisations. They offer a range of services, including campaign management; designing and building user-centred websites; social media management; CRM; and content creation from videos to blogs to games.
In 1992 James and his wife Anna Kissin, Zone’s Finance Director, set up the first football club-affiliated magazine in the UK for Manchester United from their home using desktop publishing software. The magazine grew rapidly and by 1995 they were selling 160,000 copies per month. In 1999 the business was sold to Future Publishing and in 2000 Zone was formed with James recognising an opportunity to combine his editorial and content experience with the emergence of new digital marketing channels through the growth of the internet.
Zone has grown revenues consistently over the past 5 years organically and through acquisition, and is forecasting turnover of £17m in 2015.
At the same time as BGF’s investment, Zone has also appointed Jim Kelly as Non-Executive Director. Kelly, a founder of Rainey Kelly Campbell Roalfe, has huge experience as an entrepreneur building enduring agency brands as well as more recently working with digital start-ups. He stepped down from his role as Dentsu UK Chairman in 2013 and has since been working as an independent consultant to digital, advertising and marketing services agencies.
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.
THE EXCHANGE LAB
BGF provided £5m of growth capital to The Exchange Lab in November 2013.
The business, co-founded by entrepreneurs James Aitken and Tim Webster, delivers digital advertising campaigns across display, video, social media and mobile channels, evaluating a billion audience interactions daily. Its proprietary plaform, Proteus, provides advertisers and brands with visibility across twelve DSPs, enabling them to access unrivalled volumes of digital inventory at lowest cost.
The company invested BGF’s capital in Proteus, integrating an additional eight Demand Side Platforms (DSPs) and boosting campaign automation by developing advanced APIs. It also embarked on a focused sales strategy in North America, delivering top line growth and demonstrating commercial scale on the Proteus platform.
In December 2015, BGF successfully exited its investment in the firm, following its acquisition by WPP for an undisclosed sum. The Exchange Lab’s people and technology are now being integrated into WPP’s GroupM.
This was second high-profile ‘scale-up’ exit for BGF in the technology, media and telecommunications (TMT) sector following the acquisition of Unruly by Newscorp in September 2012.
Chris Hodges, an investor at BGF, oversaw BGF’s initial investment in The Exchange Lab and served as BGF’s non-executive director on the board of the company.
Ben joined BGF in April 2013 and is responsible for sourcing and completing investments in the London and South East region.
Prior to this he worked for lower mid-market private equity firm GCP Capital Partners (now renamed Kester Capital) and completed investments in the retail, leisure and media sectors. Ben has also worked for Octopus Ventures where he was involved in growth capital investments across the UK and the Real Estate Principle Investment Area at Goldman Sachs. Ben began his career at KPMG working on private equity due diligence across a wide range of sectors and geographies.
Ben has a BA in Philosophy from Durham University and is a qualified Chartered Accountant. He is married with two cats and lives in south London. Ben is a qualified ski instructor and keen sports fan and still plays the occasional game of rugby.
“BGF is a great place to be right now. We’re focused on backing exciting UK businesses and helping talented and ambitious entrepreneurs fulfil their growth plans. With £2.5bn at our disposal we are creating a growth capital market within the UK and it is hugely rewarding to be a part of that.”
- Acro Aircraft Seating (Board Director)
- Zone (Board Director)
- Gymbox (Board Observer)
- The Exchange Lab (Board Observer)
- Tax Systems Plc
- Setfords Solicitors (Board Director)