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Homebuy

Transaction Type: MBO
Status: Current Investment
Sector: Retail & Financial Services
Investment Date: July 2007
Deal Size: £22 million

Endless Contact: Nick Leitch

THE BUSINESS

Homebuy is a leading national supplier of electrical and household goods that reached a market capitalisation of more than £100 million before plummeting into administration in September 2006. Significant equity investment from Endless supported a £22m management Buy Out enabling Homebuy to recommence new sales and the provision of cash loans using personal credit facilities. Customers pay home-visit collectors every four weeks from a coin meter attached to their televisions.

Formed in 2003 Homebuy Group floated on the AIM market of the London Stock Exchange in April 2004, subsequently acquired Telebank and invested heavily in new channels, diversifying into retail stores. The company was considered a star performer, reaching a market valuation of more than £100 million.

However, Administrators were appointed to Homebuy in September 2006 after a fall in cash collection combined with spiralling costs to force the company quickly into insolvency. The Buy Out delivered the re-emergence of a substantial, profitable and growing business serving approximately 60,000 households, with a workforce of 400 people and annual turnover of £35 million.

The Walsall headquarters is supported by a national distribution centre in Manchester and a further nine service depots around the UK - in Belfast, Bristol, Chester Le Street, Dundee, Glasgow, Rotherham, Sevenoaks, Walsall and Wigan.

INVESTMENT COMMENTARY

The investment from Endless has secured a majority stake in Homebuy Group following the acquisition from Administration. The management team, led by the Managing Director Phil Goad and Steven Banks, Finance Director, had worked hard to maintain the value in the company through the Administration process. They developed a robust business plan focused on supporting its approximately 60,000 loyal existing customers.

With the backing of Endless, the company is poised for a return to growth through providing high-quality products and loan services to the sub-prime market place.

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