Total Capital sells Arthouse to NorthEdge

Mikkel Stern-Peltz
20 October 2015

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British GP Total Capital Partners has sold its stake in wall coverings and home decoration products supplier Arthouse to NorthEdge Capital Partners.

NorthEdge will acquire a majority stake in the business through the SBO, and back current management.

Total Capital's exit comes eight years after it acquired Rossendale-based Arthouse in a 2007 MBO. Under private equity ownership, Arthouse increased its annual revenues from £17m to £25m, according to the GP.

The deal is the fourth and final exit for Total Capital's 2006 fund, which delivered a 1.9x return to its LPs on realisation and will be the last fund raised by the GP, which offers a blended debt and equity product.

Total Capital, which spun out from Iceland's Glitnir bank in 2006 with a £46m fund, will now raise capital on a deal-by-deal basis.

A spokesperson for the GP told unquote" that favouring deal-by-deal investing over a traditional fund structure will be a more effective approach for the firm's single-source combined debt and equity product. The firm also argues the move offers distinct benefits to investors, including a more efficient fee structure and an accelerated rate of return.

Total Capital also said the deal-by-deal approach meant lower overheads, and less pressure to deploy capital. The GP will target deals with an enterprise value of £5-20m.

Previous funding
Total Capital acquired Arthouse in an MBO led by the company's managing director Anita Kenyon and three fellow directors in November 2007.

Company
Arthouse is a Lancashire-based supplier of wall coverings and home decoration products to home improvement retailers such as B&Q, Wilkinsons and Homebase.

Founded in 2000, the company sells wall art, room dividers, mirrors, cushions, tiles and wallpaper, among other products. The company had revenues of £25m last year and employs a workforce of 65.

People
Natalie Eastham is a founding partner at Total Capital. NorthEdge director Jon Pickering led the SBO.

Advisers
Vendor – KPMG, Jonathan Boyers, Alex Hartley (Financial due diligence); Pinsent Masons, Helen Ridge (Legal).
Equity – DWF, Jonathan Robinson, Vicky Ross (Legal); BDO, Matt Copley, Bob McDermott (Financial due diligence); Credo, Simon Bones (Commercial due diligence).
Management – UNW, Paul Kaiser (Corporate finance); Ward Hadaway, Katherine Hay-Heddle (Legal).