3i to take Hobbs to next stage

Europe's largest listed private equity group has agreed to a £111m secondary of the UK retailer from Barclays Private Equity.

3i has bought out Barclays Private Equity's stake in UK women's fashion retailer Hobbs in a deal valuing the business at £111 million (€161 million; $204 million).
 
The buyout, which is expected to be completed by the end of November, has seen the management team turn an initial investment of £500,000 into £24 million in under two years.
 
Barclays Private Equity contributed £15 million to a £30 million MBO led by managing director Nick Samuels in December 2002. Yesterday the firm agreed to sell its 80 percent stake in the company for £75 million. Samuels and five other directors received £24 million for their 20 percent stake, half of which will be reinvested to raise their shareholding to 37 percent.
 
Hobbs is an up-market retailer of women's clothing and footwear, employing its own design team and more than 1,000 staff. The company began life in 1981 as a single store in London's Hampstead district. The founders, Israeli-born Yoran Anselm and his wife, British designer Marilyn Anselm, left in 2002.

Over the last two years, Hobbs has grown from 34 to more than 60 stores; 3i hope to increase this to 80 by the end of 2006. The company's pre-tax profits doubled to more than £9 million in the year to last January, and are forecast to hit £13.5 million this year according to Wednesday’s Financial Times .
 
Barclays Private Equity was advised on the transaction by Hawkpoint Partners, Addleshaw Goddard and KPMG. 3i were advised by PWC and Travers Smith Braithwaite, while Hobbs' directors were advised by BDO Stoy Hayward.
 
3i Group invests in businesses in Europe, Asia and the US. The group owns part of global menswear label Gant, and has been searching for new retail investments since its recent exits from holdings in retailers such as Pets at Home, Early Learning Centre and Ben Sherman.
 
Barclays Private Equity operates seven offices in the UK, France, Germany and Italy. Its UK focus is on consumer and travel, financial services and healthcare.