Piper sells Forthglade to IK

IK is taking an 80% stake in the company, in a deal that is reported to value Forthglade at around £50m, according to the Sunday Times.

IK is currently investing from its IK IX fund, which closed on €2.85bn in May 2020. It invests in companies with enterprise values of €100-500m, investing equity of €50-150m.

A spokesperson for Piper told Unquote that initially the firm had planned for a formal sale process to occur in April 2020, though it was delayed to September 2020, which IK pre-empted with its bid.

Following the transaction, joint managing directors Gerard Lovell and Chris Brooking, will continue to lead the business and retain a stake, and are expected to invest in the company as part of the deal also.

Return multiples were not disclosed but the spokesperson told Unquote that Piper's entry multiple for the firm was "considerably lower than the exit multiple".

Previous funding
In 2011, Lovell and Brooking acquired the company in a management buyout.

Piper invested £6m in the business in September 2015, when the business had sales of £11m. At the time, Piper was investing from its fifth-generation fund, which closed on £107m in July 2011. The fund has realised several assets to date, including menswear company Orlebar Brown and bar chain Be At One.

Santander also provided debt funding for the building of a factory in 2018, which was expected to triple production capacity, the spokesperson said. In addition to the factory construction, the spokesperson said of the firm's strategy during the holding period: "The strategy was to enhance the team, clarify the brand and broaden communication channels, as well as build branded sales across different distribution networks, including internet retailers and the company's own website."

Company
Based in Winkleigh, Devon, Forthglade has been manufacturing dog food since 1970. The company now generates revenue of £22m and employs 130 people.

People
Piper Private Equity – Libby Gibson (partner).
Forthglade – Gerard Lovell, Chris Brooking (managing directors).

Advisers
People – Houlihan Lokey (corporate finance); Womble Bond Dickinson (legal); PwC (financial due diligence); EY Parthenon (commercial due diligence).

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• Topics
• Exits
• Buyouts
• UK / Ireland
• Consumer
• United Kingdom
• Piper Private Equity
• IK Investment Partners
• Houlihan Lokey
• PwC
• EY (Ernst & Young)
• Tikehau Capital