Darwin bulks up with Maximuscle

Darwin Private Equity, a lower mid-market private equity firm established earlier this year with backing from Lord Rothschild, has completed its first deal with the £75m (€98.6m) acquisition of Maximuscle, a UK sports nutrition company.

The vendor was Piper Private Equity, a London-based investor focused on investments in consumer brands. The firm’s portfolio includes investments in shoe retailer Pied à Terre, bar group Pitcher & Piano and restaurant chain Tootsies. Piper invested £8m in Maximuscle in 2004.

Acquisition finance was provided by nabCapital, Royal Bank of Scotland and CapitalSource.

Founded in 1995 by sport nutrition expert Zef Eisenberg, Maximuscle develops and markets a range of sports nutrition performance foods sold through high street outlets including Argos, Asda, Boots, Tesco, JJB and Waitrose, as well as its online platform. The company employs 53 people at its Watford headquarters.

Neil Sutton at PricewaterhouseCoopers, which ran the sales process, said that there was considerable trade and private equity interest in Maximuscle, which has an estimated 32% share of the £125m sports nutrition market.

Chris Curry, managing director of Piper, said that Maximuscle’s sales had trebled, profits had increased fivefold and the company’s value had increased from less than £10m to the current £75m.

Jonathan Kaye, one of the three founders of Darwin and a former executive at CVC Capital Partners, said that it was important for the firm to make its first deal.

“We’re a new firm and we’re still fundraising, so a lot of our limited partners are looking at us and saying: ‘They’ve got a great track record but can they do it at Darwin?’” he said.

Kaye added that Darwin had been looking at Maximuscle since March, after it had been brought to the firm’s attention through a corporate finance boutique and a past association with Maximuscle’s chairman Paul Hicks.

Darwin’s plan for the business will be to increase awareness of the existing product portfolio, bring out new products targeted at new markets and take Maximuscle into Europe, using the founders’ experience at both CVC and Permira in dealing with European businesses.

Darwin Private Equity was launched in March last year with a fundraising target of £250m. To-date, the firm has received £125m of commitments from investors including Goldman Sachs, OXIP and Pantheon, as well as a cornerstone investment from RIT Capital Partners, a publicly quoted investment trust chaired by Lord Jacob Rothschild.