LDC tees up £40m retail deal

Lloyds Development Capital has taken a majority stake in UK-based golf equipment retailer American Golf Discount Centre in a transaction valued at £40m.

UK mid-market firm Lloyds Development Capital has acquired a 50 percent stake in American Golf Discount Centre, a UK-based golf retailer, in a transaction valued at £40 million (€59 million; $73 million).

The MBI, which sees the introduction of two well known figures in UK retail to the business, was also backed by Royal Bank of Scotland. Jonathan Fellowes, former finance director of discount retail chain Bonmarché, will become the new CEO of American Golf. He will be joined by chairman Tim Brookes, former CEO of UK photography chain Jessops.

Alongside LDC’s 50 percent shareholding, the management team is reportedly taking a 35 percent stake in the business, with former owners Howard Bilton and Tony Norton retaining a 15 percent stake and consultancy roles to the business.

For the financial year ended January 2004, American Golf had sales of £63.7 million, with an operating profit of £6.7 million. The company currently has 61 stores throughout the UK.

The transaction was led for LDC, which is part of the Lloyds TSB Group, by Martin Draper, a director in the Birmingham office. Wragge & Co (legal) and Deloitte (financial) advised LDC.

LDC has a regional network of ten offices throughout the UK and typically invests £2 to £30 million of equity per transaction. Since its inception in 1981, the company has completed over 325 investments.

Recent realisations for the company include the sale of UK software provider Iris Capital to Hg Capital in July and the £122.5 million sale of UK discount clothing retail chain Ethel Austin to ABN Amro Capital in June.