Electra Private Equity to wind down

Electra will sell Photobox for £98m and will receive £21m from the Knight Square deal, in addition to a further £13m as a loan repayment.

The firm intends to distribute excess cash as an initial special dividend of £140m or £3.65 per share in December, subject to the completion of the Photobox transaction, and as a subsequent special dividend of £0.54 per share following the sale of Knight Square.

Electra, alongside Chamonix Private Equity, bought a majority stake in Knight Square, formerly known as Peverel, from administrators Zolfo Cooper in a £62m deal closed in 2012. Electra invested £22m in the acquisition. The company, in administration since March 2011, completed a refinancing in October 2014 that allowed it to make loan repayments of £14m to Electra.

Electra invested £89m in Photobox alongside Exponent Private Equity in 2016, in a deal that was understood to sit around the £400m mark.

Following the sale of the two businesses, Electra intends to sell off its remaining assets including restaurant chain TGI Fridays and footwear retailer Hotter Shoes.

According to a statement, Electra has reduced leverage in both businesses in order to allow them to focus on medium-term operational optimisation. TGI Fridays and Hotter Shoes operate in the UK consumer market, where current challenging trading conditions are reflected by low market multiples.

The wind-down of the firm is the culmination of an extensive review initiated at the start of 2016 and launched two months after shareholders voted in favour of activist investor Edward Bramson and Ian Brindle taking seats on the company's board of directors.

Four months after the board changes, the contract of Epiris (then known as Electra Partners) to be the investment portfolio manager of Electra Private Equity was put on termination notice, with the GP's mandate ending in May 2017. Epiris has recently held a £821m final close for Epiris II, its first vehicle raised as an independent fund manager.

Company
Knight Square, founded as Peverel in the 1980s, provides property management services, including security systems, telecare and telehealth, insurance services, and residential property management. The company operates three divisions: retirement, property management and building technologies, as well as an insurance services business by the name of Kingsborough. Based in New Milton, UK, the group employs 4,200 staff and has annual turnover of £75m.

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