Mobeus reaps 3.1x on £36m trade sale of Emac
Mobeus Equity Partners has sold Emac, a UK provider of car service plans, in a trade sale to Innovation Group for £36m in cash, equivalent to 12x EBITDA.
Mobeus reaped a 3.1x return on its original £6m investment through the sale, with the investment generating an IRR of 49%.
Innovation has paid £36m in cash for the business, but a further payment of £10m will be payable in early 2017 depending on Emac's profit growth up to 2016.
Emac CEO Angela Barrow, who led the company's management buyout in 2011, will continue to lead the business, having agreed to stay on for a minimum of two years. Emac will also continue to operate from its current headquarters located in Crewe.
Since Mobeus's investment in the company, Emac's turnover has grown by approximately 60%.
Mobeus has been firmly in divestment mode this year, with the sale of Emac marking the VCT's seventh exit so far this year. Overall, the firm's seven divestments across 2014 have returned cash proceeds of £93.6m, representing an average 3x money multiple.
Most recently, the VCT divested Essex-based ladder maker Youngman to WernerCo at the end of October.
Previous investment
Mobeus (then Matrix Private Equity) invested £6m in the management buyout of Emac in November 2011. The deal was thought to give the company an enterprise value of less than £15m, according to unquote" data.
Yorkshire Bank provided a £4m senior debt package to facilitate the deal, which was initiated by Baker Tilly. At the time of Mobeus's investment, Emac employed 55 staff and generated around £5m in turnover.
Company
Founded in 2004 and headquartered in Crewe, Emac is a provider of outsourced car service plans to car manufacturers and franchised dealers.
The company claims to have sold 1.5 million service plans since its establishment a decade ago. According to Mobeus, Emac will help car dealers generate around £133m in after-sales revenues this year.
In 2013, Emac generated £7.4m in revenues and an EBITDA of £2.9m. The company is expecting to reach an EBITDA of £3.5m in 2014. It employs 75 staff.
People
Angela Barrow is the CEO of Emac. Andy Roberts is the CEO of Innovation Group. Ashley Broomberg is a partner at Mobeus.
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