Dewhurst / Angloarch
Transaction Background
In August 1995 Graphite Capital backed the £17 million management buy-out of Dewhurst and acquisition of 125 properties through a joint venture property vehicle, Angloarch. Both acquisitions were made from the receiver of Union International. The Dewhurst business consisted of the 200 best outlets of the nationwide butchers chain. The Angloarch transaction included both current and former Dewhurst properties.
Deal Attractions
The Dewhurst business had been available for purchase for some time, but was not seen as attractive given the inherent risks associated with the meat industry. By separating the business into two companies we were able to create a profitable opportunity. We acquired the properties at a discount and effectively purchased the Dewhurst trading business at no cost. By acquiring the best 200 Dewhurst outlets, the management team had the opportunity to re-establish a very popular, well known retail brand as a profitable business.
Achievements
- the Angloarch properties were sold within 18 months generating a gain of £4.4 million
- we made a return of 76 per cent on our investment in Angloarch
- Dewhurst suffered from a series of meat industry scares but responded by cutting costs and reducing the number of outlets
- the business remained the UK’s premier independent meat retailer
Exit
- Dewhurst was refinanced in June 2000 providing us with a gain of £3.2 million in addition to the proceeds from the Angloarch sale
- we sold Dewhurst to a trade purchaser in February 2005
- our total return was £9.4 million which was 2.0 times our cost
- we achieved an internal rate of return of 38 per cent
