Bridgepoint has fought off competition from a handful of other buyout houses and trade buyers to acquire Wiggle, an online cycling retailer founded in 1999, from UK private equity group Isis Equity Partners.
The company has performed strongly under Isis Equity Partners' five years of ownership, growing sales and earnings before interest, tax, depreciation and amortisation by 50 percent per annum over the last three years according to the firm. Although Wiggle began by selling cycling accessories online, it soon branched out into selling bikes themselves, gaining popularity and confounding sceptics who judged bicycles to be ill-suited to an online sales channel.
Bridgepoint will pay £180 million for the business, it said in a statement, with an additional £20 million payable if certain conditions are met on its eventual exit. The £180 million pricetag represents a valuation of more than 12 times the company's earnings before interest, tax, depreciation and amortisation.
The quantum of Isis' return on its investment was not disclosed, and Isis could not be reached for comment by press time.
HSBC and Investec provided senior debt to fund the acquisition, with the package understood to be about £60 million.
Nomura, Clifford Chance, KPMG and market due diligence firm Javelin advised Bridgepoint on the deal, while Eversheds provided legal advice to Isis. Eversheds also represented the management team, along with Jamieson Corporate Finance and PricewaterhouseCoopers.
Wiggle's management team, headed by former Asda head Andy Bond and Humphrey Cobbold, have made a substantial re-investment in the business and will remain with the company.
The auction, managed by Rothschild, attracted widespread interest in the early stages with a number of private equity firms and trade buyers involved according to reports. Buyout houses linked to the process included Advent International, EQT and 3i Group.
Vince Gwilliam, a partner at Bridgepoint, said in the statement: “Wiggle is benefitting from strong structural market drivers such as the shift to online retailing combined with the trend towards fitness and health living and the increasing popularity of cycling as a pastime. In addition, it has had a strong track record of profitable organic growth.”
Bridgepoint said the UK cycling market alone was worth £1.4 billion last year and has grown rapidly in the last five years. It estimated international markets were worth more than £25 billion. The value of adjacent product categories running and swimming was more than £10 billion.