Management Buy-Out of Virgin Wines
HMT, led by partner Andrew Thomson and director Paul Read, undertook financial due diligence for leading private equity firm Mobeus Equity Partners (“Mobeus”), Connection Capital and management, on the buy-out of Virgin Wine Online Limited (“Virgin Wines”), the major UK wine retailer.
Norwich based Virgin Wines was founded in 2000, and sells boutique high-quality wines produced by small independent winemakers. The business, which employs approximately 160 staff, had revenues of £35m in the year to June 2013, and is targeting £50m of sales in the next five years. The firm was acquired by the Direct Wines group in 2005, but the Virgin brand and distinctive positioning were very much retained. Direct Wines, which was founded in 1969 as Bordeaux Direct, is a family owned business with 1,000 employees worldwide and annual sales of circa £350m.
Virgin Wines CEO Jay Wright, CFO Graeme Weir and Marketing Director Paul Adams, have acquired the business, backed by private equity groups Mobeus Equity Partners and Connection Capital.
Following the management buy-out, the business is well positioned to expand with a niche range of wines, over 90% of which are exclusive to Virgin Wines and unavailable from other providers, as well as innovative customer loyalty schemes, coupled with the general trend of growth in the online wine market.
Jonathan Gregory, Partner and Chief Investment Officer of Mobeus, commented:
“The team at HMT were an important part of getting the transaction completed and a pleasure to work with. They maintained a professional approach throughout the process, identifying the key financial drivers of the business and setting out the issues arising in a clear manner.”
Paul Read commented:
“We are delighted to have advised management and their investors on the MBO. Virgin Wines is very innovative in its approach to marketing and we are excited about their outstanding growth prospects. We look forward to working with management and their co-investors in the coming years.”