YFM, 3i sell Go Outdoors to JD Sports in £128.3m deal

YFM, which in 2011 partially realised its stake to 3i via a replacement capital and expansion deal, has generated a total return of £23m. The figure represents 40x its original investment in the company.

The sale has also generated proceeds of £34m for 3i and its funds, a source close to the situation told unquote”. The GP originally invested from 3i Growth Capital Fund, which closed on €1.2bn in 2010.

It is also understood the deal represents an uplift on Go Outdoors’ valuation as of the end of September 2016.

The sale is structured as £112.3m in cash, with JD assuming net debt of approximately £16m, according to a statement issued by the listed trade buyer. Go Outdoors founders Paul Caplan and John Graham will also leave the company following the transaction.

Under the tenure of both YFM and 3i, the company has expanded through the opening of new stores and the development of its online platform. At the time of YFM’s initial investment in 1998, the business operated from one location in Sheffield, expanding to 30 UK stores by the time of 3i’s investment. It has since grown further to incorporate a total of 58 stores and has increased its revenues from £2m in 1998 to £202m in the year to January 2016.

Under the tenure of both YFM and 3i, Go Outdoors has also focused on recruitment to its senior management team. The company appointed Chris Matthews, formerly CEO of Dixons Retail in Greece, as its CEO in 2013, before hiring Claire Webb, formerly CFO of Maplin, as its CFO in 2015.

Go Outdoors undertook a refinancing in October 2013, securing a new £33m debt facility from Barclays. The financing deal came with a three-year maturity, with the option to extend to autumn 2018. It is not known if 3i or YFM returned capital to investors as part of the refinancing.

Previous funding
YFM first invested in Go Outdoors in June 1998, investing an undisclosed sum in support of the company’s management buyout. Four years later, the GP invested an additional undisclosed sum to support its expansion plans.

3i invested £28m of replacement capital and growth capital in Go Outdoors in April 2011, acquiring a minority stake in the business via the process. At the time, the sale marked a 30x return on investment for YFM.

Company
Founded in 1969 and headquartered in Sheffield, Go Outdoors is a retailer of outdoor equipment and clothing for camping, cycling, fishing and walking. The company generates a turnover of £202m with EBITDA of £14m, according to publicly available records, and has a headcount of around 2,400.

People
YFM Equity Partners – Paul Cannings (director); David Hall (managing director).
Go Outdoors – Chris Matthews (CEO).

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