ECI serves up tasty return with £75m rhubarb sale

The sale of its stake in the catering group to fellow UK firm Livingbridge will deliver a 3x return to investors in ECI 9.

UK mid-market private equity house ECI Partners has sold its stake in catering group rhubarb to fellow UK firm Livingbridge, according to a joint statement from the firms.

The deal marks the first investment in the £660 million ($842 million; €782 million) Livingbridge 6, which closed in September.

It is understood the deal values rhubarb at around £75 million.

The sale will deliver a 3x return to investors in the £430 million ECI 9, which closed in December 2008 after just three months of marketing.

rhubarb was originally established in 1996 as an events business, expanding in 2003 to include the operation of lease and concession contracts, initially by providing catering at Ascot Racecourse.

Today, the company operates long term contracts at venues including the Sky Garden at the “Walkie Talkie” building in London, the Royal Albert Hall and events at the Goodwood Estate. It also provides bespoke catering solutions at around 600 events per year.

The company operates out of offices in London and Surrey, and employs around 250 full-time staff and more than 900 temporary staff.

Since ECI’s investment, total revenue at rhubarb has more than doubled, the firm said.

This is the seventh exit from ECI 9, which have delivered a weighted average multiple of cost of 4.4x. Previous exits from the fund include employment law and health and safety solutions business Citation, which delivered a 5.4x return, and CarTrawler, which the firm sold to BC Partners in a deal generating a 5.7x return and an internal rate of return of 88 percent.

There are eight portfolio companies remaining in ECI 9.

Under Livingbridge’s ownership, rhubarb will seek to double in size in the next four years, continuing its growth across the UK and internationally.

Livingbridge 6 is almost twice the size of its predecessor, which closed in 2012 on £360 million. That fund also made its final investment this week, investing £23 million in email signature software provider Exclaimer.

The business will use Livingbridge’s investment to expand relationships with partners, add scale by broadening its product offering, and invest further in infrastructure and customer services to capitalise on its market position, the firm said in a statement.