Electra Private Equity sets out 2021 exit plans

Harriet Matthews
15 April 2021

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Electra Private Equity has set out its 2021 exit plans, which will comprise the sale of its final portfolio companies: restaurant chain TGI Fridays and shoe retailer Hotter Shoes.

The listed GP initiated a strategic review in 2016, following a vote by shareholders to appoint Edward Bramson and Ian Brindle to the company's board of directors. Electra announced the winding down of its portfolio in 2018, as part of the third stage of its strategic review, which was to begin with the sales of online photo business Photobox and property management firm Knight Square.

Epris, then known as Electra Partners, was previously the investment portfolio manager of Electra Private Equity, until the termination of its contract in May 2017.

Both of Electra's remaining portfolio companies have experienced difficulties in trading in the past year as a result of coronavirus lockdown restrictions. However, the GP said in a statement that the businesses have achieved significant developments and improvements in the past 12 months.

Electra acquired Hotter in 2014 in a deal valued at around £200m. Hotter posted revenues of £89.3m and EBITDA of £4.3m in the year ending on 31 January 2020, but was forecast to generate £47m in sales alongside a £9m loss in the following year, a report from the Sunday Telegraph published on 21 June 2020 stated.

Electra said in a statement that Hotter has made good progress in 2021, with overall year-on-year, like-for-like sales rising by 6% for the three months to the end of March. In the same period, sales from direct channels were up 34% year-on-year. Q1 2021 EBITDA also rose by £900,000 compared with the same period in 2020, the GP said.

Electra hired Stifel for the sale of Hotter Shoes in November 2020. Electra said in a statement that the timing of the process would depend on the trading patterns of Hotter's new business model focused on direct-to-consumer in the UK and US.

Hotter entered into a company voluntary arrangement in June 2020, in which Electra made an additional equity commitment of £2m. The company also announced plans to close more than 45 stores, leaving it with 15 remaining retail sites.

Electra said in a statement that TGI Fridays has now opened 32 of its 87 sites for outdoor dining, following the easing of coronavirus lockdown restrictions to allow hospitality businesses to operate outdoors. The GP acquired the UK franchise of TGI Fridays from AAC Capital in December 2014 in a deal that valued the company at around £225m. AAC had acquired the business from Whitbread in a £70.4m deal.