Endless LLP Exits Neville Johnson Group

Endless LLP is delighted to announce the successful exit of its investment in Neville Johnson Group (“Neville Johnson” or “the Group”) via a secondary management buyout led by Neville Johnson CEO, Nigel Pailing, and supported by the private equity firm, Key Capital Partners.

Endless has made a full disposal of its interest in the Group. In a £12.5m transaction the exit represents a 7x money return for Endless on its initial investment and an IRR in excess of 300%.

Based in Manchester, Neville Johnson is a leading designer, manufacturer and installer of premium fitted furniture for the home. It is best known for its “bespoke solutions” for the home study, bedroom, home cinema and lounge areas of the house. The Group has annual revenue of £17 million and employs over 150 people.

Endless supported a management buyout in February 2006 led by Nigel Pailing (CEO) and Keith Bennett (Finance Director). Endless also introduced Steve Sutherland as Chairman at this time. During the two year investment period, the results have been outstanding across all facets of the business. In particular, annual revenue has grown by over 40%, operating profit has increased six-fold, and in December 2007, despite an uncertain retail environment, the Group delivered a 42% like-for-like improvement on December 2006 orders. The increased performance has been delivered via a combination of capital investment in the factory and showrooms, product development and an enhanced marketing strategy. Endless’ initial investment provided funding to support these initiatives and freed the Group from its historic financial constraints.

Warwick Ley, who is head of Endless’ Manchester office and led the investment, commented “When we initially invested in Neville Johnson, the business was facing some significant challenges. However, management and the workforce have demonstrated a commitment to quality and attention to detail that is rarely witnessed today, consistently achieving record breaking results in all areas of the business. He added “Neville Johnson represents a shining example of performance improvement – the essential ingredients of a committed team, an excellent product and strong brand, an appropriate funding structure and a ‘can do’ attitude of all those involved with Neville Johnson led to this being one of our most successful investments to date. The business has exciting plans ahead and we will be delighted to watch its future success with Key Capital Partners as the new investors.”

Nigel Pailing, CEO of Neville Johnson, said “When Endless came in to support the business early in 2006 we were impressed with both the speed and clarity of what they offered. They were perfect for the company at the time and have more than delivered on the commitments they made. The introduction of Steve Sutherland completed the team and together we have been able to successfully restructure the business, building on what was always an exceptionally strong brand.”

He added, “We are delighted to be moving forward with Key Capital Partners. The company has ambitious plans and KCP have already demonstrated their understanding and support for the vision we have of the future.”

Peter Armitage, Partner at Key Capital Partners in Leeds commented “We are delighted to be supporting Neville Johnson’s management team in taking the business forward and helping with their plans for continued growth. It is rare to come across a management team of this quality, which is demonstrated by the tremendous job they have done over the last two years. We are very much looking forward to working with them.”

Ian Plumb at Endless supported Warwick Ley on the transaction. Endless and management were advised by Clearwater Corporate Finance (Paul Jones and Nick Holder), Walker Morris (Debbie Jackson, Rebecca McCall, Simon Concannon and Bernadette Pope) and Ernst & Young (Nick Hatton).

Paul Jones of Clearwater said: “Neville Johnson has become the natural choice for high quality fitted furniture for the home. The investment by Endless has helped it to overcome its earlier challenges and strengthen its position in the market. It is an example of the way in which private equity houses can work with businesses to play a positive role in improving their performance and helping them to develop and grow.”