LDC secures Antler luggage deal

LDC’s Birmingham office has backed the management buy-out of luggage brand Antler in a deal thought to be worth around £15m.

The mid-market private equity firm, part of Lloyds Banking Group, said the luggage company’s strong brand meant it was ideally placed for growth in new markets in the Far East.

The transaction will secure around 300 jobs at the Bury-based company, which has debts of around £25m, and was previously owned by Barclays Private Equity.

The long-drawn-out process began last autumn with the appointment of KPMG Corporate Finance at the behest of Antler’s lender, Bank of Scotland.

This followed a breach of the banking covenants at the company in 2008 as a result of a slump in sales and high costs to service its debt.

Despite more than 20 expressions of interest, including bids from turnaround specialist Endless, and NGBI Private Equity, a solvent sale was not possible due to a deficit of £8m in one of the company’s pension funds.

It is expected the Government’s Pension Protection Fund will be asked to provide a safety net for those affected.

A previous deal to sell to LDC fell down eight weeks ago, but the transaction was resurrected this week.

Most recently filed accounts for 2008 showed that Barclays Private Equity was owed £16.8m in unsecured loan notes, while £14.4 was owed to Bank of Scotland. The latter figure is understood to have been reduced to around £10m.

Although exact terms were not disclosed, it has been rumoured that LDC has invested around £10m of equity.

LDC has installed David Benjamin, a former chief executive of Royal Worcester, as Antler’s new CEO.

Terry Stannard, a non-executive director with extensive experience of private equity-backed companies and a former chief executive of several listed businesses, has been appointed non-executive chairman.

Following the deal, the management team plans to consolidate the brand’s leading position in the UK luggage market and accelerate sales in several major international markets.

These include Australia and North America – where it has already successfully penetrated the travel goods market – and the Far East and Middle East, where it sees significant opportunity for a brand with Antler’s quality and pedigree.

The business also plans to increase the marketing support for its portfolio of brands while continuing its investment in new product development.

Mr Benjamin said: “With the backing of LDC and Lloyds TSB, a highly capable management team and a sound capital structure, we now have a fantastic opportunity to invest in our brands, continue developing our market-leading luggage range and drive retail distribution in the UK and key international markets.

“The acquisition is an excellent outcome for our dedicated employees, loyal customers and trusted partners, whose continued support we recognise and value greatly.”

LDC Birmingham’s Chris Hurley, the investment director who led the transaction on behalf of LDC, said: “Together, Antler’s brand recognition, product quality, multi-channel distribution model and established supply chain in the Far East creates a major opportunity to increase its penetration of the global travel goods market.
 
“Its resilience – having retained its market share in one of the worst climates for consumer goods in several decades and consistently delivered good underlying profits – is a clear signal of its strengths.”

He said with the right financial headroom to execute its growth strategy, the company was well placed to take advantage of a recovery in the sector and fulfill its potential at home and overseas.

Jonathan Boyers, head of corporate finance for KPMG in the North – which has managed the sale process – said: “We’re delighted to conclude a transaction which both safeguards jobs and ensures the long-term future of the Antler brand.

“From the outset, there was a high level of interest in the business, which is testament to the strength of the brand and the profile of the business.”

Additional funding was provided by Lloyds TSB Corporate Markets acquisition finance.

Antler designs, sources and supplies a wide range of suitcases, holdalls, rucksacks, suit and laptop carriers and business cases under the iconic Antler brand as well as Revelation, Bramble & Brown and Gracie Mae.

Its products are sold through its own network of UK stores and concessions as well as major multiple retailers and hundreds of independent stores. It also supplies own label ranges for several leading retailers.

Around one fifth of its £40m sales are from overseas markets, predominantly Australia, North America and northern Europe.

•    Additional reporting by Duncan Tift, Deputy Editor, West Midlands