Flowers Direct Ltd (United Kingdom) - Nov 2007

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01 November 2007

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Zeus Private Equity (ZPE) has acquired a majority stake in online floral and gift company Flowers Direct Ltd. The value of the deal was not disclosed. The investment represents ZPE’s second from its maiden fund, a vehicle targeting £100m which held a second close on £65m in June 2007. The transaction was structured using a newco and is described as a growth capital investment. There was no new debt involved in the deal. ZPE was introduced to the deal on an exclusive basis by one of the private investors in its fund. ZPE’s investment will enable Flowers Direct to invest further in operational infrastructure and senior personnel in order to continue its organic and acquisitive growth. In particular, Flowers Direct intends to broaden its product offering and expand the number of high street brands in its portfolio, while at the same time online sales are forecast to show strong growth.

Company

Since its inception in 2002, Morecambe-based flower and gift retailer Flowers Direct has established the second-largest floral relay network in the UK and Ireland, with 1,200 member florist shops. It operates as a multi-channel retailer selling products via its website, call centre and store relay network. The company has also developed a branded customer base supplying online floral and gift offerings, including flowers, wine, soft toys, hampers, perfumes and experience days, to major retailers, such as Debenhams and Boots. In May 2007, the company’s rapid expansion culminated in the acquisition of competitor, Flowergram. It employs more than 100 people and is expected to turnover in excess of £10m for the financial year 2007/08.

People

Gary Tipper, Ed Fazakerley and Beth Houghton led the deal for ZPE and join the board as nonexecutive directors. ZPE has introduced Pets at Home’s Anthony Preston as chairman. Michael Fort, currently CEO of AIM-listed Synexus Plc, also joins the board as a non-executive chairman. Ian Rawlins is the founder and managing director of the business.

Advisers

Equity - BDO Stoy Hayward , Matt Copley, Stephen Green (Financial Due Diligence)Equity - Halliwells, Adam Hulme, Mark Dawson, Rebecca Grisewood (Legal)Equity - Javelin London, Richard Wolff (Other Due Diligence)Equity - Mkonsult, Mark Kennedy (Other Due Diligence)Management - Cobbetts , Ian Riggs, Robert Turnball (Legal)

Sourced from: UK & Ireland unquote" 357 (Nov 2007)