Apax Backs Evans In Virgin Radio Coup

The December sale of Richard Branson’s Virgin Radio to DJ and television presenter Chris Evans must surely rank as one of the highest-profile UK private equity transactions of the year. The deal, led by Apax Partners & Co and valued at GBP85 million (ecu 126 million) debt free, succeeded in the face of a higher bid from Capital Radio; Richard Branson has been quoted as saying that he thought Chris Evans would prove a “more sympathetic partner”.

As well as making a substantial cash investment, Chris Evans has transferred the business and assets of the Ginger Group of Companies, which includes his TV and radio production vehicles currently producing programming for the Channel 4 TFI Friday series and the Virgin Breakfast show, into a new company, to be named the Ginger Media Group, which is also acquiring the Virgin Radio business. In return, Chris Evans together with Ginger Partners managing director John Revell, receives 55% of the enlarged group. Apax, which is investing GBP30 million, will own a 20% stake, as will Richard Branson and his family trusts. The remaining 5% is held by other key managers of the enlarged group. David Campbell has been appointed chief executive of GMG and Andy Mollett will be chief financial officer, with John Pearson as chief executive. Paribas, Virgin’s existing bankers, provided a GBP42.5 million debt facility to support the transaction.

Apax Partners was already familiar with the Virgin Radio business, having featured as a founder shareholder at its launch in 1993.

Chris Evans has acquired a reputation for volatility during his media career. However, Apax director Barbara Manfrey pointed out that it was important to differentiate his attitude to business from his TV and radio persona, adding that his cash commitment and transferral of the Ginger businesses are evidence of the seriousness of his approach. She stressed that Apax “has complete faith in the ability of Chris Evans and the combined Ginger and Virgin management team to develop the business to its full potential”.