Midlands based family cycling business partners with BGF
– £2.8m invested to expand Rutland Cycling’s estate of destination stores and e-commerce capability –
In March 2014, BGF continued to support the leisure sector when it invested in one of the UK’s leading independent cycle retailers, Rutland Cycling.
BGF invested £2.8m of growth capital in Rutland, a family owned business that is based in the East Midlands.
The investment will fund the refurbishment and extension of Rutland Cycling’s existing estate of stores; as well as its national expansion, with four new outlets set to open in prominent UK leisure and tourist destinations over the next 4 years. The investment will also enable the business to develop its e-commerce capabilities, including its website www.rutlandcycling.com.
In addition to providing growth capital, BGF introduced the business to Keith Pacey and Keith Fleming who joined the board as non-executive Chairman and non-executive Director respectively. Pacey is the founder, and former CEO and Chairman of Maplin Electronics and has also held a number of NXC seats including at Mountain Warehouse, and LBM Direct Marketing Fleming is the former Finance and Strategy Director at B&Q plc, former CEO at Woolworths Group plc and former CFO of Blacks Leisure Group plc. Tim Whittard, Investment Director at BGF also joined the company’s board.
Rutland Cycling is led by Paul Archer and David Middlemiss who took control of the business in 2013, but have a long history in a business that was originally founded in 1981 by Paul’s parents, Dave and Ann Archer.
Rutland Cycling sells and hires premium cycling products from its four stores in the Midlands and via its website; and is a preferred retailer for the UK’s three best selling cycle brands, Giant, Trek and Specialized. It has been named Independent Cycle Retailer of the Year for three of the last four years and its website consistently ranks among the UK’s top 10 online cycling retailers. The business currently turns over approximately £10m each year.
Rutland Cycling’s retail outlets, which include one of Britain’s biggest bike shops, are located in leisure destinations in Lincolnshire (Rutland), Cambridgeshire (Grafham Water) and Northamptonshire (Fineshade Wood), all of which benefit from extensive cycle trails and high footfall. In addition to retailing and hiring premium products, Rutland Cycling also offers workshop and test ride facilities so that customers can have their bikes set up, adjusted and serviced in store or can try out the product range on relevant terrain.
David Middlemiss, Managing Director at Rutland, reflected that:
“We are extremely pleased to be opening a new chapter, one that will bring exciting developments for our customers and our people. Our vision is to be Britain’s best cycling destination, and our staff have worked incredibly hard over the last year to be recognised as both the UK’s best Independent Bike Retailer and Women’s Independent Bike retailer of the year in recent months.
“Working with BGF now allows Rutland Cycling to realise the ambition we have to take a unique model, rooted in a passion for cycling and customer service, and inspire more people to own and ride a bike. This is excellent news for everyone associated with our business.”
Tim Whittard, Investment Director at BGF who joined the board of Rutland Cycling, commented:
“Rutland Cycling is a business with a thirty year heritage that has developed a strong brand and fantastic relationships with the UK’s best selling bike companies. With the rising popularity in cycling, has come high levels of competition from online retailers in this space and Rutland’s combined bricks and mortar and e-commerce strategy and its differentiated customer offering has enabled it to hold its own in this competitive market.
“Our investment marks the start of a partnership with the company and we look forward to working with the management team, Keith Pacey and Keith Fleming to take a successful well established model and expand it across wider geographies and to reinforce the business’ place in the cycling retail market.”
Founded in 2006 by ex-rugby player and experienced industry operator Jon Wright, award-winning Xercise4Less, one of the UK’s leading low-cost gym chains currently has around 250,000 members and a successful chain of existing gym sites, predominantly located across the North of England but with a growing footprint of sites across the country.
As a result of its organic roll-out, Xercise4Less now operates 35 gyms, employs over 600 people and has an increasing national coverage with sites across the north of England, the Midlands, the South West, Scotland and Wales, and has opened its first gym inside the M25 in August 2015, In Hounslow. Further sites are planned in London and the South East.
Uniquely to Xercise4Less, its gyms are typically located at large out-of-town sites with floor sizes of 30,000 square feet or more that offer advantages to customers over traditional city centre budget gyms such as additional space, more gym equipment and a wider variety of choice and plentiful parking.
The budget gym sector has increased the size of the UK private fitness market by around nine percent since 2011, with one in 12 people owning a gym membership. Compared to the industry average for budget gym chains, Xercise4Less’s members are twice as likely to keep their membership longer than 12 months.
BGF originally backed Xercise4Less in August 2013, with a £5m investment to provide the business with capital needed to support management’s 5-year plan, which included the rollout of new gyms nationwide. A new growth capital injection of £7.6m in 2016, in addition to further funding provided in 2014, takes BGF’s total investment to £19.7m.
Since BGF’s original investment, the Leeds-headquartered business has opened 23 new gyms. Total sales grew to £21.9m in the 12 months to July 2015, up from £12m in its previous financial year.
PEYTON AND BYRNE
Peyton and Byrne secures £6.25m funding from BGF
Peyton and Byrne operates in three distinct areas. It currently operates restaurants at eight iconic London visitor attractions including The National Gallery, the Royal Academy of Arts and Kew Gardens. Peyton Events provides catering for private functions at twenty high profile venues in London such as The Wallace Collection and Lancaster House. And finally, the business runs retail bakery and café outlets in central London locations offering a modern take on British baking traditions.
The business was founded in 2005 by the renowned restaurateur and face of BBC Two’s Great British Menu Oliver Peyton along with his sister Siobhan Peyton, who holds the role of CEO. Oliver entered the restaurant trade in the early nineties when he opened the iconic Atlantic Bar & Grill. In 2004, Peyton launched the eco-friendly ‘Inn the Park’ in the heart of St James’s Park, the start of the current Peyton and Byrne collection of cafés and restaurants. Oliver was awarded an OBE earlier this year for services to the hospitality industry and has worked with Siobhan throughout the development of Peyton and Byrne along with other family members, Caitriona and Marie.
London is one of the most popular visitor destinations globally, attracting both domestic and overseas tourists. The museums and galleries sector that Peyton and Byrne operate in is the largest and fastest growing sector within the visitor attractions market. On the events side of the business, the company catered over 650 events in 2011 including corporate functions, weddings, bespoke parties and major conferences. In 2012 Peyton and Byrne delivered nearly £20 million of revenues and has a track record of increasing turnover at each of its venues within the first year of operation.
In December 2012 BGF invested £6.25 million of growth capital for a minority stake in London based Peyton and Byrne.
BGF’s £6.25 million investment will help accelerate the company’s roll-out programme of high-street retail bakeries over the next four years and facilitate new restaurant launches. It will also fund continued investment in people and as a result of this expansion, the company expects to create approximately one hundred new jobs.
In addition to funding, BGF contributed additional support to the company through the introduction of Mike Johnson as non-executive Chairman. Mike is the former Managing Director of the Corporate Services and Leisure Division at Sodexo UK and was the CEO of Whitbread’s restaurant division which included the Costa, TGI Fridays and Cafe Rouge brands.
BGF took a minority stake in Peyton and Byrne and Alistair Brew joined the board. The investment represented BGF’s fifth investment in a London based business and was its third investment in the leisure and hospitality sector.
Wear Inns continues acquisition trail
Wear Inns, a company focused on acquiring and managing a chain of community pubs across the North of England, has successfully acquired a further two premises from the Orchid Pub Group. The company acquired nine pubs from TCG Bars in July 2012, so has completed a total of 11 acquisitions only five months after receiving a £10 million funding package from NVM Private Equity (NVM) and Business Growth Fund (BGF). This will bring Wear Inns’ managed pub estate to a total of 26 premises.
The newly acquired premises include The Colonel Prior in Sunderland and The Park in Bradford. Both pubs fit nicely into Wear Inns’ target criteria of community-focused establishments with a potential for development.
John Weir, Managing Director of Wear Inns:
“In 2006, our objective was to acquire 20 pubs across the North East and Yorkshire, so we have achieved this and more over the years. We were clear that managed pubs were the way to go as they are clearly driving the market in terms of positive like- for-like growth. This year has been phenomenal and we are delighted to complete the second part of our acquisition strategy – with help from NVM and the Business Growth Fund.”
Mauro Biagioni, Director of NVM Private Equity:
“John Weir and John Sands have used their extensive experience of managing large pub chains to build up an impressive estate of premises across the North. This is a management team that truly understands its market and its customers. We are pleased to be a part of their ongoing success in an industry that has had its ups and downs over the years.”
David Colclough, Investment Director at BGF:
“In Wear Inns, we are backing a company with a clear strategy of buying and building an estate of revitalised community pubs in the North of England and this latest acquisition is a demonstration that this progress continues at pace. It is a compelling growth story and one which we are delighted to be involved in.”
Duncan Reid, Partner and Head of Corporate Law at Watson Burton:
“Wear Inns is a company which has gained strength and momentum over the last year with key acquisitions in the North of England. The key to its success is the management team’s ability to acquire and manage pubs under the Wear Inns’ brand whilst retaining the individuality of the community where each pub is located. As a firm, we have advised Wear Inns for a number of years and taken great pleasure in watching the company grow. We are sure that the latest of their acquisitions will be as successful as the last and wish them the best of luck in their future endeavours.”
Wear Inns expands pub portfolio
Wear Inns, a company focused on acquiring and managing a chain of community pubs across the North of England, has purchased 9 pubs from TCG Bars. This will bring Wear Inns’ managed pub estate to a total of 24 premises, with plans to acquire more in the near future. This acquisition comes two months after an injection of growth capital provided by NVM Private Equity and Business Growth Fund.
The newly acquired premises include The Bedroom in Whitley Bay, Black Bull in Morpeth, Greens in Sunderland, Lambton Arms in Chester-le-Street, Ye Olde Lang Jack in Whickham, Ship and Royal in South Shields, Lloyds Arms in Grimsby, Porter Cottage in Sheffield and The White Bear in Barnsley.
John Weir (Managing Director) and John Sands (Chairman), both long-standing pub entrepreneurs and Wear Inns’ founders, have established a reputation as credible acquirers in the market. The team has created a winning formula of purchasing well-located and often underperforming pubs with huge potential. Their premises are run and staffed by Wear Inns’ employees, to ensure a consistent management approach and high levels of customer service – without eroding the independent feel and atmosphere. The pubs are predominantly wet-led (i.e. focused on drink sales) and one of the benefits of being managed rather than tenanted is that they have more of a say in the range of products sold. The premises are deliberately unbranded to reinforce the community nature of the pubs.
John Weir, Managing Director of Wear Inns: “We are highly delighted to acquire this package of well-known pubs, with some iconic sites situated in areas that we know very well. The pubs will complement our existing business and enhance our growth strategy. All of the pubs are planned to receive capital investment and some new retail trading formats in the near future; with a clear emphasis on standards, service and exceptional retailing. This is the second transaction Wear Inns has made from TCG, after acquiring the highly successful Cross Keys Washington in December 2009.
As we develop we are hopeful of adding another four North East and Yorkshire pubs to the portfolio this year; with more acquisitions planned in early 2013. We should also create 40 new jobs as the business grows this year, with further new jobs expected in early 2013. It has been a complicated process of raising funds and making the acquisitions over the last six months. We were guided through this process by Duncan Reid and Paul Wigham from Watson Burton Newcastle, Simon John and Paul Mankin from PwC Newcastle.”
Wear Inns has acquired the pubs with the £10 million recently provided by existing investor NVM Private Equity (NVM) and new investor Business Growth Fund (BGF). BGF co-invested £8 million and NVM a further £2 million. This brings NVM’s total investment since 2006 to £6.2 million.
Mauro Biagioni, Director of NVM Private Equity:
“The Wear Inns’ management team has stuck to its business strategy since 2006, using their extensive experience of the industry to create an estate of unique community pubs that meet the desires of the regulars, as well as passing visitors. Wear Inns has increased its value considerably since inception and we are delighted to continue supporting the company’s acquisition strategy.”
David Colclough, Investment Director at BGF:
“The expansion of Wear’s estate of pubs follows our recent investment in the company and demonstrates the enormous potential for this business to grow through continued acquisition. We will continue to lend our support to the management team as they take the business into its next stage of development, solidifying its position as one of the leading pub chains in the North of England.”
Northern Pub Group Toasts £10M Equity Investment
Founded in 2006 by local entrepreneurs John Weir (CEO) and John Sands (Chairman), Wear Inns focuses on the acquisition and management of freehold community pubs across the North East and Yorkshire. The estate currently comprises 15 sites, including The Townhouse in Whitley Bay, Millstone in Gosforth, Black Bull in East Boldon, Cross Keys in Washington, Guidepost in Springwell, New Inn in Durham, Priory in York, New Inn in Wetherby, The Sun in Shipley and the Courthouse in Barnsley. Wear Inns is headquartered in Billingham, County Durham, and currently employs 175 people. BGF and NVM’s £10m equity investment will enable Wear Inns to acquire further sites over the next few months, creating a further 40 new jobs, and provide flexibility for further acquisitions thereafter.
BGF and NVM Private Equity (NVM) has commited £10m of growth capital in acquisitive Northern pub chain, Wear Inns. BGF invested £8m for a minority stake in the business and will join the existing board.
NVM has backed Wear Inns from start-up and to this point has £4.2m of capital invested in the business. Since then, the company has built up an estate of 15 sites through regional and national acquisitions; from chains such as Mitchells and Butler, Spirit, TCG Inns, Barracuda Pubs and Bars, and Greene King. On average, Wear Inns has succeeded in improving the turnover of its pubs by c90% within six months of their acquisition and refurbishment. In the last three years, Wear Inns has trebled its sales with net revenues now totaling £7.3m and has achieved like for like sales growth of 7.2%. This is a second investment for BGF in the North of England within six weeks, following its backing of Manchester and Leeds based Mexican food chain, Barburrito, last month. It is also the second co-investment for BGF.
In recent years there has been a strong outperformance by the managed pub model where the company owns the freehold and employs its own staff, as adopted by Wear Inns. Chairman John Sands and MD John Weir who started the business in 2006 have significant experience in the Hospitality sector. Sands developed the Hartlepool based Pubmaster chain into one of the largest in the UK, selling the 3200 pub estate in 2003. John Weir was Retail Director for Bass/M&B, mainly responsible for the North East and North of England before joining John Sands at Pubmaster. Wear Inns was introduced to BGF by PWC.
The advisers to the transaction were KPMG (vendor due diligence), Watson Burton (lawyers to Wear Inns), Dickinson Dees (lawyers to NVM), and Addelshaw Goddard (lawyers to BGF).