Bargain Booze set for £65m float
BARGAIN Booze is planning to raise up to £65m by floating on the Alternative Investment Market later this month.
The group’s Crewe-based parent company Conviviality Retail wants to use the cash to give private equity backer ECI Partners an exit and to fund expansion in the south east. It is expected that the company will have a market capitalisation of between £62.5m and £70m.
Manchester-based ECI Partners backed a £63.5m management buyout at the business in 2006 and holds 75%.
Last year it tried to sell the business for £100m but the Financial Times suggests a float will still allow ECI to treble the value of its investment as it has paid down some of Conviviality Retail’s debt, replacing it with a loan note.
The business has 611 outlets and achieved revenues of £372m for the year to April, down from £395m. Earnings before, interest, tax, depreciation and amortisation were down 4% to £12.5m. It is led by Diana Hunter who ECI appointed from Waitrose in November to target growth.
Diana Hunter said: “I see a great opportunity to grow this business through uniting and aligning the franchisees with the company, a most powerful force in generating optimal performance.
“This together with development of our offer and expanding our footprint into unrepresented areas will drive the company’s growth. The innovative share incentive scheme for franchisees and the appropriate capital structure will provide a firm foundation for the company’s plans.”
Manchester-based Zeus Capital acted as adviser to the company, while Oriel Securities has joined Zeus as joint broker. The deal, is thought to be one of the largest equity fund-raisings in AIM, and will be the biggest AIM IPO this year.
Nick Cowles of Zeus has led the deal.
