Epiris sells Cala and Retirement Bridge to Patron

Kenny Wastell
19 April 2017

Tweet
Facebook
LinkedIn
Google plus
Send to

Epiris has sold its stakes in home builder Cala Group and residential equity release business Retirement Bridge to Patron Capital Partners for a combined ТЃ94m.

Patron originally co-invested alongside Epiris in deals for both companies, with the original Retirement Bridge acquisition taking place just 15 months ago and the Cala investment dating back to 2013.

According to advisory firm and stock broker Numis Securities, the sale of Cala generated a 1.6x money multiple for Epiris.

The deal is the latest in a raft of exits by the vendor as it approaches the end of its 12-month notice period as investment portfolio manager of listed LP Electra Private Equity. It follows the divestment of nursery school business Treetops Nurseries to trade buyer Busy Bees; the sale of its remaining 17.8% stake in listed tenpin bowling operator Hollywood Bowl for £40m; and the sale of its remaining stake in Allflex Corporation to an undisclosed existing shareholder for £70.3m.

The termination of Epiris's contract with Electra was the result of a strategic review set in motion by the LP's activist investor, Edward Bramson, in January 2015. In May 2016, the LP announced the termination of Epiris's contract with effect from 31 May 2017. The GP subsequently rebranded from its former name, Electra Partners, in December 2016 as a result of the split.

The GP will only receive 80% of carried interest earned on investments divested by Electra after its contract expires, according to Numis.

Epiris said in a statement it had no option but to sell its position in Retirement Bridge as the termination of its management contract with Electra meant it was no longer able to support the previously agreed business plan for the company.

The GP retains stakes in Photobox, TGI Fridays, TechInsights, Pine and Knight Square.

Previous funding
Epiris originally invested £13m in the Patron-led buyout of Cala from Lloyds Banking Group in April 2013, in a deal worth £210m. The former then invested a further £15m in the company in March 2014 to facilitate the acquisition of luxury house builder Banner Homes.

In January 2016, Epiris and Patron invested in the £325m carve-out of Retirement Bridge from parent company Grainger, in what is described by the vendor as having been a "50:50 joint venture".

Companies
Prior to its carve-out, Retirement Bridge (then known as Grainger Retirement Solutions) was a subsidiary within corporate Grainger, a listed residential landlord founded in 1912. The spinout specialises in residential equity release products and, at the time of Epiris and Patron's initial investment, managed a portfolio of 3,500 properties in the UK.

Cala is a home builder founded in 1875 and is headquartered in Edinburgh. The company generated a turnover of £587m in the year to June 2016, according to publicly available documents, with operating profits of £78m.

People
Epiris – Alex Fortescue (managing partner); Charles Elkington (partner); Owen Wilson (investment director); Arvind Tewari, Nicola Gray (investment managers).