Maplin Electronics
Transaction Background
In June 2001 Graphite Capital led the £41 million management buy-out of Maplin Electronics from Saltire, an investment company. Maplin operates a fast-growing chain of high-street and out-of-town retail stores, a mail order catalogue and expanding internet business. Its product range comprises an extensive number of electronic components and accessories.
Deal Attractions
We backed an exceptionally broad management team with strong expertise across all key areas of this fast-growing consumer retail business. Maplin generated strong sales from a variety of store locations, making it highly suitable for nationwide retail roll-out. We were also attracted by its lean cost structure and ability to expand further without significant investment in central overheads.
Achievements
- the continued store roll-out proved hugely successful
- like-for-like sales grew at double-digit rates throughout our ownership
- the company increased sourcing from the Far East and maintained strong control of operating costs
- turnover more than doubled to almost £100 million between 2000 and 2003
- operating profit quadrupled to £18 million and operating margin grew from 12.3 per cent to 18.0 per cent
Exit
- Graphite and the management team put the company up for sale in early 2004, as sector ratings were at a cyclical high and the business performed strongly
- Maplin was sold in September 2004 in a £244 million secondary buy-out
- the proceeds represented a multiple of 9.5 times our initial cost of investment and an internal rate of return of over 120 per cent
