Avocet Hardware (United Kingdom) - Dec 2007

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01 December 2007

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Hotbed has backed the £23m management buyout of Avocet Hardware, a DIY supplier, from New York Stock Exchange-listed Masco Corporation. The off-market opportunity was introduced to Hotbed by Bill Eastwood of Eastwood Anglo Corporate Finance Ltd. Eastwood is also a Hotbed investor member. Forty-five Hotbed investor members invested a total of £3.25m of equity to take a stake of approximately 45% in the newco. The deal was supported by a £20m asset-based lending facility and working capital provided by Landsbanki Commercial Finance. The asset-rich nature of the business which includes freehold property, fixed assets and a large stock base made asset-based lending the most appropriate financing option for the deal.

Company

Headquartered in Brighouse, West Yorkshire, Avocet is a supplier of screws, nails, fixings and general ironmongery products to the UK’s biggest DIY retailers including B&Q, Focus DIY and Wickes. It is also one of the UK’s largest suppliers of hardware to the window and door industry. Products are manufactured at its own operations in China and Taiwan as well as being sourced from elsewhere. The company was established in the mid-1970s. It employs more than 1,000 staff and generates profit of c£2.6m on sales of more than £40m.

People

Bernard Dale led the deal for Hotbed. Bill Eastwood has been appointed as a non-executive director of Avocet. Roy Wakeman, who led the management buyout and successful exit of Leaderflush & Shapland, has joined as the chairman of the board. David Lomax and Peter Jones led the deal for Landsbanki.

Advisers

Debt - Eversheds, Nigel Dale (Legal)Equity - CIL , Sebastian Chambers (Commercial Due Diligence)Equity - EMW Law, Stephen Evans (Legal)Equity - KPMG, Allison Legg , John Kelly, Julia Lea (Financial Due Diligence)Equity - Michael Lamb Ltd, Michael Lamb (Commercial Due Diligence)Management - Shoosmiths, Alastair Peet, Emma Dolphin, Oliver Brookshaw (Legal)