NBGI makes 6x return from retail sale(3)

The buyout firm has completed a lucrative exit from UK outdoor equipment retailer Mountain Warehouse, netting a six times return after a £15 million sale.

NBGI Private Equity has sold UK retailer Mountain Warehouse to investment group Arev for £15 million (€22 million, $31 million), in a deal that will net the UK buyout firm a six times return on its original investment.

The retailer’s current management team, led by managing director Mark Neale, will acquire a majority stake following the sale – which will give NBGI an internal rate of return of more than 50 percent over a five year period.

Kcaj, a vehicle managed by former Baugur UK chief executive Jón Scheving Thorsteinsson’s investment group Arev, is backing the deal.

NBGI bought Mountain Warehouse in 2002, investing £1.6 million of equity. Since then the retailer, which sells outdoor clothing and equipment, has grown from 15 to 33 sites, and added 153 new jobs in the UK. It now has sales of about £17.5 million.

The company began life as a factory clearance outlet, operating mainly in retail parks, but has since developed a growing presence on the UK high street and on the internet. Much of this growth has come from the development of own-brand clothing lines, which has allowed the firm to improve its brand and boost profit margins.

NBGI director Richard Morley said the repositioning had created “an operation that is more profitable, more stable and most significantly, more aligned to the demands and needs of its customer base”.