Unquote

Langholm winds up remaining assets in Verdane sale

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Verdane has acquired a portfolio of three consumer brands companies from Langholm Capital; the deal sees the GP acquire UK-based WoolOvers and Purity Soft Drinks, as well as Finland-based skincare brand Lumene.

Verdane is deploying equity via Verdane Capital X, which held a final close in January 2019 on SEK 6bn (approximately EUR 592m). The fund was 35% deployed as of June 2021, according to Unquote Data.

Verdane makes direct and portfolio acquisitions, targeting software, consumer, energy technology and advanced industrials businesses. Its previous consumer sector investments include premium women's clothing brand Baum und Pferdgarten.

The GP plans to support each company with growth initiatives, engaging its in-house operational team. This is expected to include the development of WoolOvers' online capabilities and its geographical presence, while the GP aims to assist Purity Soft Drinks with the development of its existing distributor and retailer network, as well as its digital sales channels and online advertising. Verdane intends to support Lumene with its digital marketing and direct-to-consumer sales, as well as consolidating its position in Finland and developing its presence in new markets.

Verdane intends to increase its activities in the UK following the deal, according to a statement, given that two of the companies in the portfolio deal are UK-based.

Langholm, which specialises in investments in small, branded consumer businesses, acquired Lumene from Capvis in December 2010, followed by the MBI of Purity Soft Drinks in May 2012 and the buyout of WoolOvers in July 2015. Purity acquired Firefly Tonics in 2014 under Langholm's ownership.

The deal sees Verdane acquire the remainder of Langholm's portfolio companies, managing partner Bert Wiegman confirmed to Unquote. The companies were held in its 2009-vintage second fund, which held a final close in November 2011 on EUR 172m.

Unquote sister publication Mergermarket reported in September 2019 that Lumene was up for sale in a structured auction process. However, Wiegman confirmed to Unquote that the uncertainty brought about by the onset of the coronavirus pandemic in early 2021 meant that this pocess did not result in a sale, which was expected to be to a trade buyer.

Given the stage of the fund's lifecycle, the GP decided that it would make sense to sell its remaining portfolio companies to one buyer, rather than to sell each asset to a separate buyer, Wiegman said. Verdane's long-term investment horizon and its digital experience were of particular importance, he added.

Langholm is to be wound up following its final realisations. The GP notably sold Bart Ingredients to German market peer Fuchs Group in 2017; and sold Tyrells Crisps in a GBP 100m SBO to Investcorp in 2013.

Company
Founded in 1989 and headquartered in Burgess Hill, WoolOvers is an online knitwear brand that sells woollen, cotton and cashmere clothing, as well as home and garden products. Its website operates in countries including the UK and Ireland, as well as the US, Australia, and European countries including Germany. The company posted revenues of GBP 35.6m in the 2021 financial year, versus GBP 18.8m in the 2020 financial year, according to its latest accounts.

Purity Soft Drinks produces non-alcoholic beverages including Juice Burst and Firefly. The company was founded in 1892 and is headquartered in Wednesbury. It posts more than GBP 20m in annual revenues, according to its LinkedIn profile. The company posted revenues of GBP 19.2m in 2019, versus GBP 18.1m in 2018, according to its latest accounts.

Headquartered in Espoo in Finland, Lumene is a skincare and beauty brand specialising in natural ingredients originally sourced in Finland. The company was founded in 1970 and has 330 staff. The company was targeting EUR 75m in sales for 2019, Unquote sister publication Mergermarket reported.

The combined portfolio has run-rate revenues of EUR 155m and run-rate EBITDA of EUR 14m, according to a statement from Verdane.

People
Verdane – Emanual Johnsson (partner).
Langholm Capital – Bert Wiegman (managing partner).
WoolOvers – Mike Lester (CEO).
Purity Soft Drinks – Sarah Baldwin (CEO).
Lumene – Johan Berg (CEO).

Advisers
Equity – Taylor Wessing (legal).

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