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bonmarche good deal for ISIS Capital

ISIS Capital, the private equity arm of Friends Ivory & Sime, has realised its investment in clothing retailer bonmarche, which has been acquired by retail chain the Peacock Group for GBP75 million. The deal comprised debt of GBP25.4 million in cash, the issue of GBP2.75 million guaranteed loan notes, the issue of consideration shares and the assumption of GBP24 million debt.

Last year ISIS Capital invested GBP7.3 million in the company as part of a GBP41 million funding package that included GBP34 million from the Bank of Scotland. ISIS Capital took a 20 per cent stake in bonmarche plus loan notes, the founding family retained 70 per cent and other members of the company’s board took a 10 per cent stake. As a result of the acquisition the investor will receive GBP12.8 million cash plus shares priced at GBP4.6 million.

The original investment was led by Mark Advani, head of new investments at ISIS Capital, and investment director Kate Robinson. Advani said: “We have been developing our knowledge and activity levels within the consumer markets sector over some years and had been focusing attention on the value retail space actively prior to being introduced to the bonmarche team. It is tremendous to have our sector targeted approach tested and ultimately validated through working with a business of this quality.” The other industry groups targeted by ISIS Capital are business and financial services, healthcare, media and communications and IT.

bonmarche was founded in 1982 by brothers Gurchait and Gurnaik Chima and has grown to over 250 stores in the UK with an annual turnover of GBP128.5 million last year. It employs over 2,000 employees and has a programme of store refurbishment and new store openings planned.

The discount womens wear retailer focuses on the 45-years old and over age group, while Peacock targets the 25- to 45-year old shopper.

Following the deal Michael Bullas, Peacock’s trading director, resigned and Steven Gipson, retail and HR director, also resigned as a director but will remain an employee of the group. Bullas’ brother Steve is chief executive of bonmarche.