PE group announces exit from fast-growing Lancashire business

The chairman of a Lancashire online gardening and landscaping business has completed its acquisition.

Private equity investment manager Foresight Group has announced the sale of Hedges Direct Group, an eCommerce business in the gardening and landscaping sector based in Euxton, Lancashire, for an undisclosed sum.

This is the second exit from Foresight Regional Investment LP, following the successful sale of Clubhouse Golf in March 2020, which generated a return of 6.1x.

To date, £44.1m has been returned to the fund, representing 84% of drawn capital, after just two exits and with 15 portfolio companies remaining.

Hedges was acquired after a competitive process by current chairman, Steve Caunce, who has backed the management team to continue its impressive growth journey.

Steve was introduced to the business by Foresight, which has a Manchester office, in early 2019 as part of its plan to strengthen senior management.

Steve has been instrumental in driving Hedges’ growth to date and is a natural fit as a strategic partner to take it through its next phase of growth.

The exit represents a positive outcome for all parties and will allow Hedges to focus on its goal of becoming the de-facto eCommerce horticulture platform.

Following Foresight’s original investment in August 2016, Jamie Shipley was promoted to managing director three years ago.

Jamie has worked at the group for 11 years and has extensive knowledge of horticulture and eCommerce markets.

More recently, Alex How joined from Manchester-based online retailer N Brown to lead the growth of the finance function as finance director.

Overall, staff numbers have increased by 60%, mirroring the group’s fast growth.

Hedges has gone from strength to strength and is now a leading online horticulture brand. The group encompasses three companies, all focused on various complementary horticultural niches, in particular hedging and large statement plants.

Foresight’s investment has supported management in developing the group’s online presence with improved websites and marketing strategy, greater fulfilment capabilities and new improved office facilities.

This allowed Hedges to expand its customer base, targeting both consumer and trade, leading to a 93% increase in revenues in four years.

Hedges has made significant progress in environmental, social and governance (ESG) since Foresight’s investment. The group’s products are environmentally friendly and encourage biodiversity. In addition, Hedges uses recycled water from a borehole and recycles all paper and cardboard.

Steve Caunce said: “I am very excited to have acquired Hedges.

“The team has built a very solid customer focused platform ready for growth. The potential for the business as a result of this is huge. I very much look forward to supporting Jamie and the wider Hedges team to fulfil this potential.”

Jamie Shipley said: “It’s been a pleasure working with Claire and the team at Foresight over the past four years. Together we have strengthened our management team and built solid foundations for growth.

“Since joining us in 2019 Steve has been a great mentor to me, and a very welcome addition to the Hedges family.

“His decision to acquire Hedges Direct from Foresight represents another significant milestone and the start of a new chapter for our business. I and the whole team here at Hedges Direct is incredibly excited and privileged to be involved in the next phase of development in our business, and I know we will see it continue to go from strength to strength.”

Claire Alvarez, director at Foresight, said: “It’s been fabulous to work with Jamie and the wider team at Hedges, supporting their rapid growth, which has really escalated recently following the investments made into the business.

“The growth in the eCommerce sector over the past three years has been dramatic and we are delighted that we have been able to support Hedges in its growth journey and in creating new jobs and opportunities in Lancashire. We wish Steve, Jamie and the team every success for the future.”

Foresight and the other shareholders were advised by – corporate finance: KPMG (Christian Mayo, Rick Stark, James Gaffney, Andrew Kopciowski and Klara Skopac), Alexander & Co (John McCaffrey). Legal: Shoosmiths (Tim Jackson-Smith and Kendra McCullough), BLM Law (Danny Varney). Financial diligence: Deloitte (Jodi Birkett, Anika Keys and Alex Ault). Commercial diligence: Javelin (Matt Jeffers, Humphrey Rose and Henry Knight).