3i, Permira, PPM exit Birthdays

The private equity consortium have sold portfolio company Birthdays, a UK greeting cards retailer, to a management buy-in team in a deal worth more than £60m.

A group of UK-based private equity firms has exited their investment in Birthdays, a retailer of greetings cards and party products based in Greater Manchester.

Permira and PPM Ventures originally acquired the business in October 1996 backing a management buy-in led by John Lovering and Chris Woodhouse. In 1999, 3i acquired a 39 per cent stake for £25m, leaving Permira and PPM Ventures each with a 20 per cent stake.

 

The business is being sold to a consortium of retail investors, including entrepreneur Chris Gorman, which is backed by UK private equity firm West Coast Capital. The financial terms of the transaction have not been disclosed, although the price for the business is thought to be in the region of £60m to £75m.

 

Founded in 1966, the chain with over 500 stores includes over 100 Partyland outlets and employs some 3500 people in the UK and Ireland. Turnover in the financial year to June 2003 was £144m.

 

“This is a business with significant potential but as always a number of challenges,” said Chris Gorman. “We look forward to building on the Birthdays and Partyland brands, supporting staff and offering exceptional products and service to our customer base.”

 

Interest in the business stemmed from the development of a cross-selling partnership deal brokered between gadget shop, where Gorman is executive chairman, and Birthdays earlier this year. The partnership will continue although the two businesses will remain independent of one another as both build up for the important Christmas trading season.

 

Bank of Scotland provided debt financing to fund the acquisition.