Aberdeen Murray Johnstone Private Equity, the UK-based small and mid-market private equity investor, has made a successful exit on its investment in Card Warehouse.
AMJPE backed a management buyout of the Liverpool-headquartered business in June 1998, investing £8.15m in the £12.5m deal. At the time of the investment, Card Warehouse operated 72 stores predominantly based in England and Wales. In the five-year investment period, the company has expanded to 230 shops across the UK.
AMJPE said the deal provided its clients with a return of 2.5 times the cost of their investment, achieving an IRR of 22 per cent.
Card Warehouse, the UK’s biggest discount greeting card retailer, is being sold to its smaller rival Cardfair for a total consideration of £45m including debt. Cardfair, based in Hertfordshire, is financing the deal with debt raised by Lloyds TSB Acquisition Finance and mezzanine provided by Intermediate Capital Group. The combined company will have sales of £80m.
Gary Tipper, head of English private equity investments at AMPJE said the deal was ‘a classic example’ of how private equity can be used to regional businesses into national operations. “The management team has done a superb job in expanding the company and maintaining excellent profit margins which is not always easy to do.”
The sale completes AMJPE’s second exit in 2003. In February the firm sold its interest in Telecom Service Centres, a Scottish call centre operator, as part of a £23m MBO. HIE Ventures, a venture capital fund managed by AMJPE, invested £200,000 in the business, later selling its stake for £3.9m, generating an IRR of almost 60 per cent over seven years.
AMJPE invests in a broad range of industry sectors, primarily in the UK, seeking to invest from £500,000 to £15m in small and medium-sized companies, up to a market capitalisation of £50m.