BGF makes GBP 19m minority investment in Brompton Bicycle

Ero Partsakoulaki
17 May 2023

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UK- and Ireland-based growth investor BGF has made a GBP 19m investment in UK-based foldable bikes and accessories manufacturer Brompton Bicycle, acquiring a minority stake in the business to accelerate its growth.

The firm will be investing in the business alongside existing shareholders to enhance innovation and international growth, according to an announcement.

The transaction marks the company's first capital raise to date since it was founded in 1975, it said. Brompton has been independent and owned by its founder Andrew Ritchie, the current CEO Will Butler-Adams, as well as friends, family and staff, it said.

"Post investment, BGF and Brompton's primary focus will be on facilitating growth by scaling the ecommerce channel, increasing international penetration in key markets such as US, Germany and China, and investing in new product development," BGF investor Daina Spedding told Unquote.

Brompton has grown organically over the last decade at around 20% a year, funded by reinvesting its profits, it said. Turnover grew 21% to GBP 130m for the year ended March 2023, supported by the launch of the Superlight T Line and Electric P Line products.

Looking ahead, the firm seeks to strengthen its balance sheet with a focus on sustainable growth as it continues to expand into new markets and invest in new technologies and manufacturing capabilities to meet the demand for its cycling range, it said.

BGF has invested GBP 3.5bn in more than 500 companies since 2011 as a minority, non-controlling equity partner. The sponsor expects its strategy to gain more traction as an attractive alternative to founders, filling a gap in the capital raising world, Unquote reported. Looking ahead, it expects to be deploying GBP 500m-plus per year on average, investing through the cycle.

Most recently, UK food technology developer It's Fresh! secured a GBP 6.7m investment from BGF and venture capital fund Zintinus. Newett Homes, a UK-based housebuilder, secured a GBP 10m investment from the growth investor.

Company
Founded in 1975 by Andrew Ritchie, Brompton Bicycle is a British manufacturer of folding bicycles based in Greenford, London. Its bikes are sold in 46 countries around the world and more than 70% of production is exported. The company produces almost 100,000 bikes a year and has released 1,000,000 bikes in total over the last 35 years. Its bikes fold up to a third of their size, weighing 7.45kg-12.7kg on average. The company operates 15 Brompton Junction retail stores in cities across the world and also sells to a selected 1,500 independent bike stores worldwide.

People
BGF − Daina Spedding (investor).
Brompton − Will Butler-Adams (CEO).

Advisers
Equity − Shoosmiths (legal); Azets (financial due diligence).
Company − Highstead (corporate finance); Osborne Clarke (legal).