Investee Company – Ethel Austin LimitedInvestee Company Business Type – Discount RetailerType of Financing – Institutional buyoutEquity Providers – Lloyds TSB Development Capital, Management and Private family vendors Equity Leader (Individual) – Paul Johnson, Investment Manager Lloyds TSB Development Capital Debt Providers – Barclays Leveraged FinanceDebt Type – Term debt, working capital facilityDebt Leader (Individual) – N/KEquity Amount – £20 millionTotal Deal Value – £55 million Other Advisors – Andersen, Bullivant Jones & Co, DLA, Hammond Suddards Edge, PricewaterhouseCoopers Corporate Finance Comments – Lloyds TSB Development Capital (LDC) has announced the acquisition of leading discount retailer Ethel Austin Limited, in a deal totalling £55 million. LDC provided £11 million of equity funding and were supported with debt financing from Barclays Leveraged Finance, incorporating £20 million of term debt, and a £15 million working capital facility.
The remainder of the deal was financed by management who hold a 25% stake and the private family vendors, who reinvested a small investment for a 7.5% stake. Following this deal LDC hold a 67.5% stake in Ethel Austin.
Founded in 1934, and based in Liverpool, Ethel Austin comprises 238 discount clothing stores spread nationally, and has a strong reputation for children’s wear and underwear. The policy of offering good quality products at discount prices has enabled Ethel Austin to build up a loyal customer base with the average customer visiting a store twice a week. Further development is planned with the addition of new products such as branded clothing and cosmetics at discount prices.
With this deal Ethel Austin has secured the jobs of over 2000 employee’s, while the funding will also support an aggressive expansion programme with over 90 new stores planned over the next three years. This new funding will also be used to support the strategy of opening larger stores in line with market trends and customer requirements.
Paul Johnson, Investment Manager of LDC’s Manchester office, commented: “This is a market leading, well invested business operating in a rapidly expanding market. The company is led by a highly capable and experienced management team. We believe that Ethel Austin is well placed to take advantage of market changes – its recent store refurbishment programme and move to a larger store format fits well within the market.”