Phoenix bags 3.8x from sale of Radley

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Phoenix Equity Partners has returned 3.8x its investment from the sale of handbag brand Radley & Co to Exponent Private Equity. Exponent supported the £130m secondary management buyout of Radley, beating competition from both trade and financial buyers to win a PricewaterhouseCoopers-run auction. Reports suggested Barclays Private Equity and MidOcean Partners reached the final round of the sale process.

Lloyds TSB provided a debt package to support the deal which represented one of the largest sole-underwritten transactions since last summer's liquidity crisis.

Under Phoenix's ownership, Radley's revenues increased by 47% and profits rose by 95%. Radley grew by concentrating on its wholesale business, as well as developing its retail strategy with the roll-out of three flagship stores in London and another in Manchester. Additionally the business positioned itself for international expansion and moved into other accessories. Founded in 1998, Radley has forecast revenues of £60m for the year to end of April 2008.

Phoenix walked away with £64m, equivalent to an IRR of 120% on its two-year involvement. It had already realised some value from the refinancing of the business in spring 2007. Phoenix acquired Radley in a £45m management buyout in 2006, investing £16.8m for a majority stake. (Page 29).