Rutland Partners has acquired UK gardening supplies company Gardman from a bank syndicate in an all-equity transaction, according to an announcement from the turnaround firm.
The firm is not allowed to disclose the financial terms of the deal but Rutland partner Ben Slatter noted the investment is within the fund’s “normal” range of £20 million ($31.4 million; €28.1 million) to £30 million.
Rutland will acquire an 80 percent stake with the remainder split between management, which has yet to be allocated, Slatter said. “It's a management buyout,” he said. This includes the company's existing executive chairman according to the statement.
The company was founded in 1992 and supplies garden centres, according to the statement. It came under bank ownership in 2012. “The company has been owned by the banks for a number of years and it is in need of investment in terms of systems in particular, and there is more product than can be put through, more to do with existing customers and exporting,” Slatter said.
The investment was made through Rutland Fund III, a £263 million vehicle that closed below its target of £300 million in January, as reported by Private Equity International. Fundraising began in February 2013 and the fund made its first investment in June 2014 when it bought UK retailer Maplin Electronics for £85 million from Montagu Private Equity.
When asked what accounted for the gap between investments, Slatter said that the fund had met its target of two deals a year. “We have a strong pipeline and there are other things that we have in exclusivity.”
Both Fund III investments are in “consumer-facing” sectors but the fund is not sector-specific, Slatter noted.
Rutland’s second fund, a £266 million vehicle that closed in 2006, has made one realisation, the sale of CeDo, a manufacturer of household disposable products, Slatter said. The sale in October to Straco netted the fund a 2.8x return, according to reports.
“That investment was five years old. The other investments [in the portfolio] are younger than that. The portfolio is maturing. They are not new but not on the block yet, ready for exit,” Slatter said.