Dunedin reaps 3x money multiple on etc venues exit

This was Dunedin's third exit this year, following the trade sales of WFEL and Capula to international buyers earlier in the year.

GCP's investment will fund further acquisitions and etc venues' growth in the UK and internationally. The business plans to open eight new venues in the next five years. GCP recently invested in the SBO of Iglu.com and the MBO of Excelsior Technologies.

The company was sold in a limited auction arranged by Catalyst Corporate Finance, which was mandated by Dunedin to find a successor for the business. Catalyst only approached private equity houses, partly because the management team was keen to grow the business further and partly because suitable trade buyers were hard to find in the non-residential renting sector in the current climate, Dunedin told unquote". The GP chose GCP because it felt the firm best understood the company's future growth plans and established a good relationship with management.

Debt
GCP provides blended equity and debt. The GP worked with the Co-Operative Bank on this deal.

Previous funding
Dunedin bought etc venues in an MBI in 2006, introducing Alistair Stewart as managing director. The firm provided £6m of initial funding followed by a further £4m as part of the £21m deal. Allied Irish Bank provided debt worth £10.5m, equalling 50% of the deal value.

Part of the initial financing was reserved to support an aggressive roll-out plan for further venues. However, as the business began to suffer from the recession, the plan was scaled back and existing venues were expanded instead. The resulting extra cash, alongside operating income from the business, eventually allowed the company to de-gear as well as roll out new venues.

The business grew year on year and the company invested more than £10m in new and existing venues, growing numbers from five to 12 venues in 2012. Recent openings focused on larger conferences and events with adjacent exhibition spaces.

The company's turnover increased by 140% over the holding period, from £9m to £22m, and its EBITDA grew from £2m to more than £5m. The company's debt was very low at the time of exit, according to the GP.

Company
Founded in 1992 shortly before the opening of its first venue at Avonmouth House in south London, etc venues provides spaces for meetings, training and events. The business currently operates 12 venues across London and Birmingham.

People
Nicholas Hoare and Nicol Fraser worked on the deal for Dunedin. James Blake led the deal for GCP, alongside Simon Jobson and Richard Shaw..

Advisers
Equity – Osborne Clarke, Alisdair Livingstone, Alison Johnson, Hugh Jones, Simon Jones, Michael Bell, Victoria Clarke, Daniel Barnhouse (Legal); Ernst & Young, Daniel Harris, Jo Quelch, Mike Reade (Tax); BDO, Chris Heatlie, Sarah Cumming, Gerry Davies, Vincent Shaw (Financial due diligence); Armstrong TS, Tom Raymond, Claire Brown (Commercial due diligence); Quinn Partnership; Paul Quinn, Mike Stiles (Management due diligence); Marsh, Laura Reed (Insurance due diligence).
Vendor – Catalyst Corporate Finance (Corporate finance); Dickson Minto (Legal); Ernst & Young (Vendor due diligence).
Management – Squire Sanders, Tim Hewens (Legal).

 

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• Topics
• Exits
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• UK / Ireland
• Dunedin
• Secondary buyout
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• Ernst & Young