£15m to be invested in Webb by Endless
ENDLESS is to invest £15m in entertainment retailing business Webb following its acquisition from home shopping group Webb, the Yorkshire turnaround specialist said today.
TheBusinessDesk.com reported yesterday that Leeds-based Endless had paid just £1 for Webb, which sells DVDs, music and gifts through its subsidiaries Choices UK Group and Webb Ivory Burton.
Burley-in-Wharfedale Findel has been looking to offload the business as it focuses on its core home shopping and education businesses. It was also keen to free up working capital.
Endless said one of the main factors behind the sale by Findel had been the contraction of trade credit in the home entertainment market.
Endless will therefore invest up to £15m of investment and working capital to help take the company forward.
Mathew Deering, investment director at Endless, said: “We are pleased to have been able to deliver this deal to Findel in an extremely rapid timeframe of less than two weeks from agreeing Heads of Terms.
“The funding package we are providing will allow the business to return to offering a strong service proposition to its existing customers and will provide a platform to exploit some exciting new growth opportunities.”
Garry Wilson, managing partner of Endless, and investment director Mathew Deering led the acquisition for Endless, supported by Indra Valeinis and Simon Mason.
Choices UK is one of the UK’s largest supplier of retail home entertainment products, including games, DVDs, music and gifts.
Webb is a consumer mail order business which sells a range of classic TV, film and entertainment DVDs.
The businesses had a combined turnover of £53m in the year to March 31, 2010.
However, in April Findel had to make a £61m impairment writedown, of which £45m related to Webb.
In its accounts for the nine months ended December 31 2008, Webb reported profit before tax of £800,000. Webb had gross assets of £51m and net liabilities of £37.1m at the same date.
Webb employs around 250 staff in operations in Bradford and Burton-on-Trent. It has around 600,000 mail order customers, who are sent catalogues throughout the year.
Findel, which said the disposal will free up between £15m and £20m of working capital but hit profits by £2m, acquired the remaining 70% of Webb it didn’t own for £3 last July.
KPMG, led by Christian Mayo, the firm’s head of corporate finance in Leeds, advised Findel on the deal.
