Maximuscle (United Kingdom) - Dec 2007

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01 December 2007

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Darwin Private Equity has completed its first deal with the £75m acquisition of sports nutrition business Maximuscle from Piper Private Equity. The acquisition was supported by debt provided by nabCapital, The Royal Bank of Scotland and CapitalSource.

Exit deal Piper Private Equity recouped 10x its money from the sale of Maximuscle. The £75m price tag generated an IRR in excess of 100% for Piper which had held Maximuscle since June 2004 (12 July 2004, page 37). At that time, Piper invested £3.2m in the business to take a 40% stake as part of a £9.7m BIMBO deal. Piper embarked on a brand renewal programme which involved repackaging Maximuscle products and more targeted marketing for the newly-identified customer groups. As well as improving its direct marketing approach through both catalogue mailings and online relationship management, Piper helped build a much wider distribution network to allow new consumers easier access to the product. This included Asda, Boots and Tesco, as well as Argos and JJB. Over the course of Piper’s involvement, sales at the company trebled and profits increased five fold. With Maximuscle now starting to expand into international markets, Piper decided it was time to exit the business and hired PricewaterhouseCoopers initially to market it to trade buyers. After a number of private equity approaches, an auction was run targeting both trade and private equity. The final round of the sale process included two financial buyers and one trade player with the financial buyers winning out on speed. Piper had already realised its full investment from the company following a refinancing carried out by HSBC in December 2005.

Company Watford-based Maximuscle was founded in 1995. It develops and markets scientifically supported sports nutrition performance foods. The business employs 53 people.

People Jonathan Kaye led the deal for Darwin. Chris Curry led the exit deal for Piper. Zef Eisnberg is the founder of the company. Jo Platt, Simon Rolfe and Tim Cussins worked on the deal for nabCapital.

Advisers

Equity - Concise Consultants, Josh Thompson (Commercial Due Diligence)Equity - Deloitte, Carol Hinde, Liz Ballinger (Tax)Equity - Macfarlanes, Charles Bischoff, Luke Powell, Stephen Drewitt (Legal)Equity - Spayne Lindsay, Chris Packe, John Spayne, Tom Lindsay (Corporate Finance)Management - Livingstone Partners, Christopher Jones, Simon Cope-Thompson (Corporate Finance)Management - Pinsent Masons, Andrew Masraf (Legal)Vendor - BDO Stoy Hayward , Chris Grove, Lee Jefferson, Sam Surrey (Financial Due Diligence)Vendor - LEK, Dominic Miles, Geoff Parkin (Commercial Due Diligence)Vendor - Lovells, Alan Greenough, Amit Nayyar (Legal)Vendor - PricewaterhouseCoopers, Graham Bell, Neil Sutton, Sonia Kondal (Corporate Finance)