Bridges acquires ethical homeware brand Nkuku

Financial terms were not disclosed. The GP invested around £8m in equity as part of the deal, according to a source close to the situation.

The company's founders, Alistair and Alex Cooke, will reinvest in the business as part of the deal.

Bridges deployed capital via Bridges Sustainable Growth IV. The fund was launched in October 2016 and held an £80m final close in March 2019. The fund typically invests £2-20m for majority stakes in UK businesses pursuing organic, acquisitive and multi-site roll-out strategies across multiple impact themes. It usually targets growth-stage business with revenues of £5-50m and earlier-stage revenue-generating businesses targeting large addressable markets.

The deal was sourced following a competitive process run by Argyll Partners, which took around five months to complete. Bridges cited an alignment on "strategy, values and impact" with the founders as a factor in securing a deal.

Bridges said in a statement that 'nesting' is a trend likely to continue since people are expected to be spending more time at home post-coronavirus; along with the continued growth of e-commerce, the GP anticipates this will continue benefiting Nkuku, with an addressable market forecast to keep expanding at around 10% per annum.

In its financial statement for the year ending in April 2020, Nkuku stated that the onset of the Covid-19 crisis had an adverse effect on the business due to the forced closure of the Nkuku Lifestyle Store and cafés, as well as retail stores more generally when it comes to the wholesale business. However, the business said it had strongly benefited from the boom of e-commerce since. Direct-to-consumer sales have more than doubled in the last year, according to the aforementioned source.

Company
Founded in 2003, Nkuku works with artisans around the world to create and sell handmade home and lifestyle products, which combine traditional craftsmanship with sustainable natural materials. The business began by selling through a small group of retail partners; in addition, it now also operates a shop in Devon and sells directly to consumers via its website.

People
Bridges Fund Management - Emma Thorne (investment director).

Advisers
Equity - Grant Thornton (corporate finance, financial due diligence); Addleshaw Goddard (legal); CIL (commercial due diligence); Palladium (digital due diligence).
Company - Squire Patton Boggs (legal); Argyll Partners (corporate finance).

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