KCP buys Johnson from Endless

YORKSHIRE-BASED private equity firm Key Capital Partners (KCP) has supported a £12.5m secondary buy-out of Neville Johnson Group, one of the UK's best known fitted furniture manufacturers, with backing from Yorkshire Bank.

The Leeds office of KCP has invested £4.25m for a majority stake in the business.

The deal provides an exit for Yorkshire-based buyout and turnaround fund Endless, which invested in the company in February 2006 when it supported a buyout led by the current chief executive Nigel Pailing and finance director Keith Bennett.

The management team will stay with the business and are reinvesting the majority of their proceeds from the sale.

The Manchester office of Yorkshire Bank provided a flexible package comprising senior debt and working capital facilities to fund the transaction and assist with the management team's growth aspirations.

Based in Trafford Park, Manchester, Neville Johnson is a designer, manufacturer and installer of premium fitted furniture for the home.

It is best known for its bespoke furniture for the home study, bedroom, home cinema and lounge areas of the house. The group has annual revenue of more than £17m, employs more than 150 people and has a number of showrooms across the UK.

Since Endless' investment, the operating and financial performance of the group has improved significantly, with recent months in particular having seen record order levels.

The improved performance results from a combination of capital investment, primarily in the factory and showrooms, product development and an enhanced marketing strategy.

Nigel Pailing, chief executive of Neville Johnson, said: “We fully expect to forge a strong partnership with KCP and we will be working closely together to maintain our current level of growth. We've had a great experience with Endless and I am sure we will see similar success with the team at KCP.”

Roddy Kilpatrick, director of Specialist & Acquisition Finance at Yorkshire Bank, said: “Neville Johnson has become synonymous with high quality fitted furniture and is an excellent new customer for the bank. Although the company has improved its performance significantly in recent years, there remains exciting growth potential within its principal markets. Key Capital will be working closely with the management to achieve that growth and we look forward to helping them deliver their plan.”

Peter Armitage, partner at KCP in Leeds, said: “Neville Johnson is a dynamic company with a great range of products and a very talented management team.

It is rare to come across a management team of this quality, which has been demonstrated by the tremendous job they've done over the past two years, and I'm very much looking forward to supporting them as the business moves into its next phase of expansion.”

Yorkshire Bank was advised by Dean Gormley and Lauren Davies at Halliwells. The Key Capital team of Peter Armitage and Mark Buttler were advised by Sean Fitzgerald and Vicky Zivkovic at Cobbetts.

Endless and management were advised by Paul Jones and Nick Holder at Clearwater Corporate Finance, Nick Hatton of accountants Ernst & Young and law firm Walker Morris.

Financial due diligence was carried out by Will Oxley and Kerry Lane of Grant Thornton.