Investment fund puts £2.75m into e-commerce company
FORESIGHT Group has invested £2.75m in the buy-in management buyout of Lancashire-based Euxton Group.
It is the first investment made from the Foresight Regional Investment Fund, launched in December 2015 having achieved first close at £38m.
Euxton Group, an e-commerce specialist in the gardening and landscaping sector, has grown rapidly over the last three years, having achieved annual sales growth of over 30%.
The group encompasses three companies – Hedges Direct, Best4Hedging and Impact Plants, all focused on various horticultural niches, in particular hedging.
It has seen a significant increase in both the number of orders and the average order value year-on-year and is well positioned in a substantial market where online product sales are growing rapidly.
The Horticultural Trades Association estimates that the UK retail plant market is worth £5bn, while the Internet Garden Products Market report predicts a 32% rise in online garden product sales by the end of 2019.
Foresight’s investment will allow the group to further drive sales and capitalise on the increasing prevalence of ecommerce.
Michael McVey will join as managing director, working alongside the existing team of Jamie Shipley, Kathryn Gallagher and Paul Francis.
Claire Alvarez, who led the transaction out of Foresight’s Manchester office, will also join the Euxton board.
The BIMBO is the first investment to be completed from the FRIF, a dedicated regional fund focused on private equity investments into SMEs based in the North West, North Wales, and South Yorkshire, and managed by Foresight’s team based in its Manchester office.
The fund can make investments of between £1m and £5m in local growth SMEs through a variety of deal structures including growth capital, management buyins and management buyouts.
The fund achieved first close at £38m in January of 2016 and has a target final close of £60m.
McVey said: “We are excited to be working with Foresight to help Euxton Group continue its growth in the landscaping and gardening market.
“With the support of Foresight we will continue to develop the Group through improvements to our websites, adding additional product ranges and expansion into overseas markets.”
James Livingston, partner at Foresight, added: “As the first deal for the Foresight Regional Investment Fund, we are extremely pleased to have invested in Euxton Group.
“The business is a leader in its target market, and we look forward to working with the management team to create further value within the business and continue growth.”
Claire Alvarez, senior investment manager, Foresight, said: “It is a pleasure to mark Foresight’s commitment to the North West with this investment into Euxton, which has demonstrated such impressive growth over the past few years.
“I look forward to working with the management team to build innovative strategies for the business’s development nationally and internationally.”
Paula McGrath and Chris Cumber at Brabners Corporate Finance advised on the deal.
Legal advice was provided by Kieran Toal and his team at Shoosmiths and Denise Walker and Daniel Hayhurst at Brabners.
Financial due diligence was provided by Grant Thornton, led by Philip Grindley; commercial due diligence was completed by Neovian Partners, led by Lushani Kodituwakku; and Andy Airey and Michael Hicks from Catalysis Partners provided management due diligence.
The company was advised by Napthens and Cassons.
