ECI cheers Bargain Booze exit

THE flotation of Bargain Booze parent Conviviality Retail was planned in just two months.

The management team met with Manchester investment bank Zeus Capital on May 20 and the company made its debut on the Alternative Investment Market on July 31 raising £64m.

The deal gave an exit to the Manchester office of ECI Partners which backed a £63.5m management buyout at the Crewe business in 2006.

Partner John Hayhurst, pictured, said ECI was unimpressed with trade offers for the business last year so decided to sit tight and recruited former Waitrose executive Diana Hunter to oversee ongoing growth.

“We weren’t set on a float, we took advantage of market opportunity,” said Mr Hayhurst.

“Zeus was very confident that income funds would be attracted to the stability and resilience of profits delivered by Bargain Booze. There’s a lot of money in London seeking a home and with interest rates low bond markets are unattractive. Conviviality was an attractive home for some of that capital.

“Zeus delivered the float and it was a great testament to Manchester’s advisory community that they were able to deliver swiftly and discreetly. It was the biggest corporate listing on AIM to date.”

He added: “We want to achieve significant equity value creation for our investors. What we fund is companies in growing markets such as IT services, telecoms, specialist manufacturing and business services. What these businesses will have is what we believe to be compelling growth dynamics.

“We’re not interested in investing in companies that pay a yield and earn revenue from financial engineering alone. That’s not the driver of our equity value creation. We want ebitda (earnings before interest, tax, deprciation and amortisation) growth.”

ECI’s portfolio includes Fourth Hospitality, an IT company which offers software and cloud computing packages to restaurant chains; fast-growing Citation, a Wilmslow-based employment law and health and safety adviser; Knowsley-based power plant specialist Clarke Energy; and Manchester-based M2 which provides large corporates with photocopier and printer services.

ECI has invested around 60% of a £438m fund from 2009 and may start fundraising again next year.