KCP sells Neville Johnson in £20 million deal

Private equity house Key Capital Partners (KCP) has achieved a 3.8x return following the sale of bespoke furniture manufacturer Neville Johnson Group in a secondary management buyout to London-based Alcuin Capital Partners.

Neville Johnson Group, which trades under its Neville Johnson and Tom Howley brands, is a leader in the luxury market forpremium furniture and fitted kitchen products.

The Trafford Park-based company employs 270 staff and recorded turnover of £33m in the year to April 2014 – a 20% increase on the previous year.

Neville Johnson was backed by KCP in 2008 and has delivered strong year-on-year growth for the past six years. Part of this growth has been down to its acquisition of Tom Howley, which specialises in the design, manufacture and installation of luxury fitted kitchens.

Annual orders intake for the Tom Howley brand has grown from £2 million in 2010 to over £11 million this year, driven by the launch of additional showrooms in London, Brentwood and Beaconsfield.

The business will move forward with a £10 million investment from Alcuin, which sees the private equity firm take a significant shareholding in the business. Alcuin partner Mark Storey and investment director Nick Seaman led the buyout.

Nigel Pailing, CEO of Neville Johnson, said: “KCP has been instrumental in shaping our vision to become the leading provider of luxury fitted furniture for every room in the home. We are excited for the next stage of growth with Alcuin as we roll-out our brands across the UK and look to open eight new showrooms over the next three years.”

Peter Armitage, partner at KCP and non-executive director at Neville Johnson, added: “It has been a real pleasure working with a first-class management team over the years.

“During this period the business has almost doubled in size and we are confident itwill continue along the same trajectory with Alcuin’s support.”

Mark Storey, partner at Alcuin Capital Partners, said: “We are delighted to be investing alongside Nigel, Keith and their team to support the continuing success of Neville Johnson.

“Neville Johnson is a dynamic business with an excellent reputation for service, an impressive lead generation function, and rising brand recognition throughout the UK. Alcuin targets ambitious, distinctive growth companies and Neville Johnson definitely fits the bill.”

A team at KPMG advised Neville Johnson and KCP, led by Jonathan Boyers, Giles Taylor, Pinesh Mehta and Paul Dolyniuk.

Jonathan Boyers, head of corporate finance for KPMG in the North, said: “We are currently seeing a high amount of deal activity in the home improvement sector, as the uptick in the economy, coupled with the renewed confidence in the housing market, inspires homeowners to invest in their property once more.

“Neville Johnson’s unique offering of designing, manufacturing and fitting bespoke furniture to customers identified through highly effective direct marketing generated significant interest from the private equity community who are keen to invest in strong consumer brands in growth sectors.”

Will Oxley and Julia Stokes at Grant Thornton provided vendor financial due diligence. Sean Fitzgerald and Paul Johnson at Ward Hadaway provided legal advice to Neville Johnson and KCP, while Adam Greaves and Saffron Finch at Jones Day advised Alcuin Capital.

RBS in Manchester provided debt finance, led by Stuart Watson.