The Sanctuary Spa (United Kingdom) - Jan 2008

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01 January 2008

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HgCapital has sold The Sanctuary Spa Group to trade player PZ Cussons for £75m. The exit has recouped HgCapital 5x its investment in its two-and-a-half year holding period since it backed the company to acquire the products business under the same name. In 2005, Alice Alvis joined the business as its new CEO from Marks & Spencer and under her leadership, the company has significantly grown the brand by introducing new product lines and through expansion into markets in the Far East and the US. At the time of the exit, The Sanctuary Spa recorded a turnover of £26m, 70% of which was derived from the products business. HgCapital appointed Close Brothers Corporate Finance to run a sale process to dispose of the company which was reported to involve strong interest from both private equity and trade buyers. Richard Mathews led the exit deal for HgCapital.

Previous funding

HgCapital first invested in The Sanctuary Spa in 1995 (27 November 1995, page 9). In 2005, it provided the company with substantial additional funding, investing £23m to enable it to acquire the products business under The Sanctuary Spa business which had previously being operated under license (1 August 2005, page 15). This deal was supported by additional debt provided by HSBC. HgCapital held around an 80% stake in the company at the time of its divestment.

Advisers

Equity - Close Brothers Corporate Finance, Tim Leach (Corporate Finance)Equity - Dickson Minto WS, (Legal)Vendor - PricewaterhouseCoopers, Lisa Hooker (Other Due Diligence)