LDC ‘looking at options’ on Music Magpie stake

THE private equity backer of Entertainment Magpie, one of the fastest-growing businesses in the country, is reportedly looking at options which could see it sell its minority stake.

LDC, which invested in the Macclesfield-based business in early 2011, has appointed corporate financiers from Deloitte to examine options, Sky News said.

Trading as Music Magpie in this country, the group buys unwanted CDs, games, technology and most recently branded fashionwear, cleans, reconditions and repackages the goods and then re-sells it through multiple channels.

The multiple award-winning group, led by charismatic chief executive Steve Oliver, has recently launched in the US too.

In March its financial results for the year to the end of May 2012 showed dramatic growth in profits and sales.  Turnover more than doubled from £28.7m to £63.8m and pre-tax profits surged from £2.8m to £5.2m.

It is expected that strong growth has continued this year with turnover approaching £100m.

Sky News said that although LDC had yet to formally decide whether to sell its stake in Magpie, the appointment of Deloitte indicates that some form of transaction is likely.

Having taken a minority stake for around £10m in April 2011 when Entertainment Magpie was in its infancy, LDC, which is known to have had a strong relationship with management, is likely to generate an excellent return from its investment if it does decide to sell.

All parties declined to comment on the report.