20 October 2015

NorthEdge acquires majority stake in Arthouse following exit by Total Capital Partners

NorthEdge Capital, the private equity firm focused on investing in businesses in the North of England, has completed the secondary management buyout of home decoration supplier Arthouse.

The deal sees NorthEdge take a majority stake in the business, as well as an exit for Total Capital Partners,an independent firm that specialises in providing combined equity and debt funding for small and medium-sized businesses in the UK.  Total Capital backed Arthouse in 2007.

Rossendale-based Arthouse is one of the largest providers of wall coverings and home decoration products in the UK, supplying to major retailers including B&Q, B&M, Wilko and Homebase.

Since Anita Kenyon led the first MBO of Arthouse in 2007, the business has delivered impressive growth, increasing its annual turnover from £17m to £25m and its employee base from 37 to 65.  The management team has worked with Total Capital to diversify its product lines, sales channels and supplier base, and to expand internationally.

With the support of planet maids, Arthouse is now looking to further strengthen its presence in the UK, and expand into overseas markets, in particular the US and Middle East. It is also aiming to enhance its digital offering, and make further bolt-on acquisitions, with focus on other companies in the UK targeting overseas markets.

Jon Pickering, Director at NorthEdge, led the deal alongside Partner Ray Stenton, Investment Manager Phil Frame, and Investment Executive Harry Jones. Jon and Harry will join the board as Non-Executive Directors.

Anita Kenyon, Managing Director at Arthouse, commented: “NorthEdge’s investment marks the next stage of development for Arthouse. We have worked closely with the team at Total Capital for eight years since taking the business independent.  Their innovative investment structure was ideally suited to support our growth plans, with the result that we have diversified to become one of the country’s leading suppliers of interior decor solutions..

“We are now in a strong position to embark on the next stage of our development and NorthEdge’s funding will enable us to further upscale our service offering and target overseas expansion, allowing Arthouse to reach an even wider range of customers both at home and abroad.  It has been a fantastic experience working with NorthEdge so far, and I am very much looking forward to our future relationship with the team.”

Jon Pickering, Director at NorthEdge Capital, commented: “Securing the investment in Arthouse demonstrates the skills of the team at NorthEdge in originating off-market private equity transactions and also delivering wider funding opportunities for entrepreneurial businesses across the North of England. We have also been able to make use of our extensive local advisor network who worked alongside us to support us on this transaction.”

“It is great to be working with Anita and the management team – they are entrepreneurially minded with a comprehensive understanding of the market in which they operate. They have clear aims and solid plans for the future, and their excellent track record means that they are ideally positioned to target growth. With recent trends indicating that the favourable economic climate has prompted renewed interest in the home furnishing and decoration sector, this is an opportune time for the team to set its plans into motion, and we are all excited to support the team on the delivery of further successes.”

Natalie Eastham, a founding partner of Total Capital and former non-executive director of Arthouse, commented: “Anita and the team at Arthouse have done a fantastic job since the initial MBO.  They have laid strong foundations for future growth and we wish the company well as it embarks on the next stage of its development with new partners.”

NorthEdge has made 12 investments from its maiden fund, which closed at £225m in March 2013, representing over £168m of investment into the Northern business community during the last two and a half years.

Advisers:

Sell-side advisers:

KPMG – Jonathan Boyers and Alex Hartley

Pinsent Masons – Helen Ridge

 

Management Advisors:

UNW – Paul Kaiser

Ward Hadaway – Katherine Hay-Heddle

 

Buy-side advisers:

DWF – Jonathan Robinson and Vicky Ross

Financial DD – Matt Copley and Bob McDermott

Commercial DD – Simon Bones

Contact our press offices at MC2 for more information. northedge@thisismc2.com 0161 236 1352

Follow us on LinkedIn