Barony Universal Products (United Kingdom) - Nov 2007

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01 November 2007

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NVM Private Equity has wholly exited its stake in aerosol manufacturer Barony Universal Products through a trade sale to Questbridge, owners of the largest aerosol manufacturer in Russia, for an undisclosed sum, realising a return of 5.6x the money invested and an IRR of more than 29%. BCMS Corporate operated a competitive pitch process on behalf of the company, which took more than a year to complete. Norman Yarrow led the exit for NVM. The deal marks the third exit of the year for NVM, following the sale of Ithica Business Media to United Business Media, generating a return of 3x the money invested and an IRR of more than 60%, and KCS Global Holdings, which was sold to Sage for £20m achieving a return of 2.9x the money invested and an IRR of 50%.

Previous investment

NVM originally backed the £1.4m management buyout of Barony in 1999, investing £750,000 for an equity stake of just under 50% (14 February 2000, page 27). The company has grown ahead of expectations since the investment, particularly through the securing of significant contracts with multiples such as Tesco and Boots to produce their own brand products. With NVM’s involvement turnover has increased by more than 300% to in excess of £12m per annum, with profit before tax forecast to exceed £1m by the end of 2007. Barony, founded in 1994, is based in Cumnock, Ayrshire, and currently employs around 100 staff.

Advisers

Equity - Brechin Tindal Oatts, Alastair Dunn (Legal)Management - BCMS, (Corporate Finance)Purchaser - CMS Cameron McKenna, Frank Fowlie (Legal)