3i and Barclays agree terms on Hobbs at enterprise value of £111m

02 Nov 2004

3i and funds have today agreed terms for the purchase of Hobbs, the UK-based women's fashion retailer from Barclays Private Equity. Completion is subject to necessary regulatory consent and is expected by the end of November 2004.

The Directors of Hobbs are very pleased to have the opportunity to re-invest in the business alongside 3i and have increased their stake in the venture from 20% to 37%. The Hobbs management team remain with the Group with Tony Campbell as Chairman, Nick Samuel as Managing Director and Mike Trotman as Finance Director.

Hobbs was backed by Barclays Private Equity in a management buy-out led by Managing Director Nick Samuel in 2002 and has since performed strongly, with pre- tax profits doubling to over £9m in the year to January 2004. The total number of outlets has increased to over 60 from 34 in less than two years and, following 3i's investment, is expected to reach 80 by the end of 2006.

Hobbs is a fashion retailer of high quality women's clothing and footwear, focusing on products which combine contemporary style with classical elegance. It differentiates itself with its own design team, manufacturing garments from the highest quality fabric and providing first-rate customer service.  Hobbs employs circa 1,000 people in stores, which are located on prime high street locations, and concessions in high end department stores.

3i, which also owns part of Gant the global menswear label, has recently realised its holdings in Pets at Home, Early Learning Centre and Ben Sherman. As such it is known to have been looking to reinvest some of its proceeds from these highly profitable deals into another retail business.

Stuart McMinnies, 3i Director said: "We are extremely pleased to join forces with such a strong player in the industry. Hobbs is a great example of a successful, fast growing British company with a real opportunity to develop internationally. Barclays Private Equity made an excellent investment in Hobbs, and together with management we look forward to taking it onto the next stage of its development".

Nick Samuel, MD Hobbs added: "Hobbs has achieved significant growth since the MBO in 2002.

"With our wider product offering, including the fast-growing Accessories range, and our successful store opening programme, we are well placed to achieve further growth. 3i shares this strategic outlook and we are delighted that they will be assisting us in this next important phase.

"We anticipate reporting record results for the year to January 2005 and look forward to fulfilling our vision for Hobbs as a leading brand."

Steven Silvester, Barclays Private Equity Director commented: "We are delighted by the success Hobbs has enjoyed, which has produced a great return of circa five times our investment for Barclays Private Equity. We wish the business well for its continued growth and success"

The disposal of Hobbs was handled by Hawkpoint. Addleshaw Goddard and KPMG also acted for the company, whilst BDO Stoy Hayward advised Hobbs' management team.

3i were advised by PWC and Travers Smith Braithwaite.

Other recent 3i retail experience includes:
Ben Sherman exit - UK - men's fashion
GANT investment - Sweden - men's fashion
Pets at Home exit - UK - pets and pet supplies
Halti investment - Finland - sports apparel
Early Learning Center exit - UK - educational toys
Teknikmagasinet investment - Sweden - home electronics and hobby products

Notes to editors

About 3i

3i brings capital, knowledge and connections to the creation and development of businesses around the world. It invests in a wide range of opportunities from start-ups to buy-outs and buy-ins, focusing on businesses with high growth potential and strong management.

 

3i invests in businesses across three continents through local investment teams in Europe, Asia Pacific and the USA. To date, 3i has invested over £15 billion (including co-investment funds).

In the 6 months to 30 September 2002, an average of £3.1 million (including co-investment funds) was invested each working day.

 

About Barclay Private Equity

Barclays Private Equity is one of the leading investors in mid market buy-outs in the UK and across Europe, with more than 330 transactions to its name, typically ranging in size from €25m to €400m. In the UK, it has a sector focus on Consumer & Travel, Financial Services, Support Services and Healthcare. The company operates locally in the UK, France, Germany and Italy.

 

Barclays Private Equity was named "Mid-Market Private Equity Firm of the Year" by Acquisitions Monthly in their 2004 awards and has been nominated for Private Equity House of the Year in the BVCA/Real Deals Awards.

About Hobbs

Hobbs is a specialist womenswear brand with a differentiated retail proposition.  It has an enviable reputation for stylish, contemporary and well made garments and footwear, with a high quality store portfolio situated primarily in prime High Street sites.

Hobbs is renowned for their highly trained retail staff who provide a level of customer service which is respected throughout the industry.