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Four M&A firms support Ribble Cycles | True Capital deal

01 December 2015 Consultancy.uk

Bicycle retailer Ribble Cycles has been acquired by investment firm True Capital. The deal was advised on by M&A advisors from Jones Day, PwC, Napthens and Moore and Smalley.

Founded in the middle of the great bicycle boom of 1897, Ribble Cycles has over the past 100+ years grown to an international retailer of bikes, components and accessories. The company also boats a large e-commerce footprint – its online channels serve over 75,000 customers per year, offering a range of more than 13,000 SKUs.

Ribble bikes

Last week, True Capital, a London-based investment firm that focuses solely on the retail and consumer sector, unveiled that it had acquired Cyclesport North, the parent of Ribble Cycles, from the Dove family, who retain a significant stake in the business. With the move, the private equity firm aims at steering Ribble Cycles towards accelerated growth. A recent analysis from Consultancy.uk revealed that the number of bikes bought in the UK has increased between 2008 and 2014, up from 3.3 million in 2008 to 3.6 million last year, and looking ahead, favourable market conditions are expected to spur further growth. Factors driving growth include growing participation in cycling, the Government’s commitment to improving the sports infrastructure and the changing consumer attitudes to their health and wellbeing.

“We have been tracking Ribble Cycles for some time and are delighted to be able to join forces with the Dove family,” says Paul Cocker, who co-founded True Capital in October 2012 together with Matt Truman*. As part of the deal, Cocker and Truman will work alongside the existing management team to create and execute strategies, with “selected acquisitions” on the table, acknowledges Cocker.

James Dove, Ribble's Managing Director, comments: “True Capital shares our vision for the next stage of Ribble’s growth and their sector specialist knowledge and understanding of the market coupled with the appreciation of our culture make them the right partner for the future development of the business. We look forward to expanding our offering, accelerating our growth and continuing to deliver exceptional customer service to our global audience.”

Joel Smith, Nick Cook, Simon Viner, Patrick Stafford, Richard Robinson, Tony Medcalf, Paul Cocker, Matt Truman

The transaction was supported by four external advisory firms. PwC provided True Capital with financial, tax and IT due diligence, as well as tax structuring support. The Big Four’s team was led by Joel Smith, Nick Cook and Simon Viner. “Joel and the team provided excellent, focussed advice throughout the transaction. They quickly identified the material issues and worked with us in a constructive way to allow us to resolve them in accordance with the overall transaction timetable,” comments Cocker. Jones Day, led by Pat Stafford, provided legal advisory to the buyer. The Dove family was advised by Napthens, led by Corporate Finance partner Richard Robinson, and Moore and Smalley, led by Tony Medcalf.

* Both Cocker and Truman have a history with Deloitte; Truman spent four years with the firm between 2000 and 2004, while Cocker served the Big Four giant for six years.

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Private equity firms ramp up sustainability focus

19 April 2019 Consultancy.uk

In line with business leaders across the industrial gamut, private equity firms are increasingly on board with sustainability projects. According to a new study, the investment arms for major funds are implementing a number of strategies aimed at supporting sustainable economic development in line with global goals.

While the business world has finally begun to acknowledge the danger of climate change, effective action plans remain difficult to achieve. The Paris Agreement has stipulated a clear target for the decades leading up to 2100, although massively reducing emissions while not crashing the economy could be a tall order.

Businesses that are able to acquire capital can use it to boost productivity and output, thereby creating a virtuous cycle of development. However, some businesses are better able to utilise resources than others, both in terms of their relative productivity, as well as the value of the respective outcomes relative to costs (including environmental harms). Financing can therefore provide an avenue to select businesses that are aligned with various global sustainability goals, while shunning those that drive little or unsustainable social value creation.

Top moves made by investment arms towards responsible investment

Profit has for the longest time been the central criterion for investment decisions. Yet profit at any cost is increasingly seen as creating considerable social harms, while often delivering only marginal value. As a result, the private equity sector, which was initially sluggish to change its ways with regards to sustainability, has started to see the topic as an opportunity as much as a challenge.

A new study from PwC has explored how far sustainability goals have become part of the wider investment strategy for private equity (PE) firms. The report is based on analysis of a survey of 162 firms and includes responses from 145 general partners and 38 limited partners.

Maturing sustainability

Top-line results show that responsible investment has become an issue for 91% of respondents. For 81% of respondents, ESG (environmental, social, and corporate governance) was a board matter at least once a year, while 60% said that they already have implemented measures to address human rights issues. Two-thirds have identified and prioritised Sustainable Development goals that are relevant to their investment segments.

Change in concern and action on climate-related topics over time

While there is increasing concern around key issues, from human rights protections to environmental and biodiversity protection, the study finds there are mismatches between concern and action. For instance, concern among investment vehicles around climate change has increased since 2016.

In terms of risks to the PE firm itself, concern has increased from 46% of respondents in 2016 to 58% in the latest survey. However, the number who have taken action remains far below those concerned, at 9% in 2016 and 20% in 2019. Given the relatively broader scope of investment opportunities, portfolio companies face higher risks – and more concern – from PE professionals, at 83% in the latest survey. However, action is less than half of those concerned, at 31%.

Changing climate

In terms of the climate footprint of the portfolio companies, 77% of respondents state concern in the latest survey. 28% of respondents are taking action through the implementation of measures to mitigate their concerns.

Concern and action taken on ESG issues

In terms of the more pressing issues for emerging responsible investment or ESG issues, governance concern of portfolio companies comes in at number one (92% of respondents), while 60% have taken action on it. Firms have focused on improving awareness – setting up policies and a range of training modules for their professionals around responsible investment decision making. Cybersecurity takes the number two spot, with 89% concerned and 41% implementing strategies to mitigate risks.

Climate risks take the number three spot in terms of concern for portfolio companies (83%), but falls behind in terms of action (31%). Health and safety track records are a key concern at 80% of businesses, with 49% implementing action. Gender imbalance within PE firms themselves ranks at 78%, which is being dealt with by 31%. A recent survey from Oliver Wyman showed that there is gender balance at 13% of GP teams in developed countries.

Biodiversity is also an increasingly pertinent topic, with risks from pollution and chemical use increasingly driving wider systematic risks around environmental outcomes. It featured at number eight on the ranking of most likely global risks for the coming decade, with its impact at number six. As it stands, biodiversity is noted as an issue at 57% of firms, with 15% implementing action.