Graphite Capital

In December 2004 Graphite Capital led the management buy-in/buy-out of Aktrion, a leading UK outsourced service provider to the print, automotive and food sectors.

Aktrion provides outsourced managed services to manufacturing clients, primarily in the printing, automotive and food sectors, in the UK and internationally. The company is a leading supplier to the national newspaper industry and has a strong position providing testing and quality services to UK and European car manufacturers.

Since Graphite’s investment turnover has increased strongly as the business has acquired new customers and expanded into new sectors. In addition, the company has significantly increased its international footprint, establishing a new presence in France, Poland and Slovakia and increasing the size of its Spanish and German offices. In 2010 Aktrion acquired a majority interest in a food staffing business further broadening its industry sector coverage.

Inn Brighton was formed in April 2007 through the merger of C-Side, a previous Graphite investment, and Zelgrain, an operator of Brighton-based pubs.

The company operates 45 pubs, bars and nightclubs in Brighton and one pub in London. Each site is uniquely branded, 'wet-led' and run by operators encouraged to create a differentiated offering. The company targets culturally discerning customers, attracted to the individualism of each of the sites. The management team has a wealth of experience in the pub sector which has helped the company to outperform the market.

Following the merger, the company has continued to diversify away from weather-dependent sea-front clubs towards city-based pubs. A number of refurbishments across the estate have provided excellent returns on capital and in 2011 the company acquired its first site outside of Brighton. This is part of a wider geographic expansion plan for the business. 

In July 2005 Graphite Capital led the management buy-out of Integrity Software, a provider of specialist software to small and medium-sized companies in the retail and construction sectors.

In the retail segment, Integrity Software is the UK’s leading provider of hair and beauty salon software through its ‘i-salon’ software package. The company also supplies builders’ merchants and wholesalers with its ‘Trader’ software solutions. It has approximately 2,500 customers on long-term service and maintenance contracts which provide a high level of recurring revenues. The company is based in Buckinghamshire and Dublin with a support and development office in Lincolnshire.

Following Graphite’s investment, Integrity disposed of a number of non-core businesses to focus on its two core divisions: construction and retail.  Integrity’s software solution for construction companies was strengthened significantly in 2009 when Graphite backed the company to acquire Mardak, a smaller competitor. The business continues to expand its customer base across both divisions and is actively looking for further acquisitions to complement its existing product offering. 

In April 2010 Graphite Capital committed up to £50 million of equity to support the development of London Square, a new London-focused house builder.

London Square was established to develop residential housing within Greater London. The company acquires land, obtains planning permission for development, builds and sells the housing units. It is led by a highly experienced CEO with an extensive and successful track record of residential housebuilding in London. London Square was formed at a cyclical low on the market without legacy developments, so is well placed to exploit the unique development opportunities available in London.

London Square has attracted a high-quality, market-leading operational team with extensive experience of developing residential housing in the London market. The company has acquired six sites across London in attractive, affluent locations with good transport links and characterised by strong demand for new houses and apartments priced in the £0.2 million to £2.5 million range. Forecast sales revenues are expected to exceed £200 million over the next five years. 

In February 2006 Graphite Capital led the £85 million management buy-in/buy-out of Micheldever Tyre Services (MTS), the UK’s leading distributor of car, 4x4 and motorcycle tyres.

MTS is the largest distributor of tyres to independent retailers in the UK, offering all major premium tyre brands and a number of exclusive mid-range and budget brands. In addition, the company operates one of the UK’s largest chains of tyre service centres. As a result of the unrivalled depth of its product range and its strong focus on customer service, MTS is well placed to drive further consolidation of the UK tyre industry.

Since Graphite’s investment turnover and profit have risen strongly. MTS’ wholesale customer base has continued to expand thanks to additional warehouse openings across the country and further strengthening of the product range. MTS has also grown its retail chain to 64 outlets, of which 48 have been acquired since the buy-out. 

In October 2006 Graphite Capital led the £70 million management buy-out of NES, a leading provider of specialist engineers to the global oil and gas, power and infrastructure industries.

Based in Manchester, NES operates from a total of 32 locations around the world. The company’s customer base comprises large blue-chip organisations, including all major oil companies and many large international engineering businesses.

NES has continued to develop its suite of value-added services which it provides to both contractors and corporate customers. The company has opened 18 new offices, principally in its expanding overseas business, almost doubling sales and operating profit under Graphite’s ownership. The fast-growing overseas business now accounts for 65% of group revenues and for over 60% of the group’s 3,700 contractors. The company also has a permanent placement business which accounts for approximately 15 per cent of net fee income.

Graphite has provided £26 million of development capital to Optimum Care, alongside £70 million of bank debt, to enable it to build and acquire 17 care homes. Optimum was set up in June 2007 as a successor company to a previous Graphite investment, Avery Healthcare.

Optimum is a premium provider of high-quality homes and care to elderly residents across the UK. The aim is to be the home of choice in a given catchment area. As a result, high occupancy and attractive fee rates are achieved, delivering a strong financial performance.

Since Graphite’s investment, Optimum has opened ten new homes and acquired seven others. Profits are growing rapidly as the new homes are maturing. Underlying demand is strong due to the economic fundamentals of an ageing population and a decline in the supply of high-quality care and homes across the UK.

In January 2006 Graphite Capital led the £130 million management buy-in/buy-out of Park Holidays UK (formerly Cinque Ports Leisure), the UK’s fourth largest holiday park operator.

Park Holidays UK operates 25 holiday parks across the south of England. Caravan parks have a loyal and growing customer base which, combined with planning policies that restrict the development of new parks, results in a robust and resilient business model.

Graphite recruited an experienced buy-in management team to work together with one of Park Holidays’ founders. The new team had a strong track record of managing larger caravan park operators and other leisure businesses. This allowed them to make significant operational improvements at the existing parks and grow customer numbers substantially. Graphite also backed Park Holidays in acquiring six additional parks in Devon, bringing the total number of parks under management to 25.   

In February 2009 Graphite provided expansion capital to Performance Timber Products Group (PTP), a company created to acquire leading brands in the timber building products sector.

Graphite invested in PTP Group as it believed that, while the building products sector would be adversely affected by the recession, this would create attractive consolidation opportunities.

PTP had acquired Mumford & Wood, a manufacturer and distributor of high-quality timber windows, in 2006. Our investment enabled it to acquire timberwindows.com, the UK’s leading online retailer of timber windows. Graphite provided further equity in 2010 to finance the acquisitions of Dale, a window supplier to the merchant trade, The English Glasshouse, a conservatory brand, and John Porter Doors, a leading manufacturer and distributor of timber doors and doorsets. Following these transactions,  the group has a strong offering across all key product segments and distribution channels.

In January 2006 Graphite led the management buy-in/buy-out of sk:n, the UK’s leading chain of non-surgical skin treatment clinics.

sk:n is a nationwide chain of clinics offering a range of non-surgical skin and cosmetic treatments including laser-based treatments for hair removal and skin rejuvenation. The company operates in a fragmented market, which is growing strongly. sk:n has a highly professional and clinical approach which allows it to comply with the increasing regulation in the cosmetic treatment industry.

Graphite introduced an experienced buy-in management team at the outset of the transaction to enable the business to pursue rapid growth. sk:n is pursuing a rollout strategy and, since Graphite’s investment, has grown from 17 clinics to 36 through a combination of new site openings and acquisitions. Substantial investment has been made in strengthening the brand as well as in developing and professionalising the operational model, including sk:n’s customer acquisition and retention strategies. A new range of own-label skin care products has been launched, available within sk:n’s own clinics and distributed in over 100 Boots pharmacies nationwide. 

In March 2005 Graphite Capital led the management buy-out of Sure Group, a medium-sized provider of gas boiler maintenance and repair services to local authorities and housing associations.

Sure Group has a large number of long-term maintenance and installation contracts with local authorities and housing associations across the Midlands and Northwest, consistently scoring highly on quality and service standards. In December 2005 the company acquired a Midlands-based gas boiler installation business, FJ Jones, extending its geographical coverage beyond its traditional base in the Northwest of England.

Since Graphite’s investment the business has more than doubled its turnover. The management team has been strengthened significantly, with a strong focus on business development and customer retention skills. The company is well placed to expand further as local authorities are seeking to secure long-term solutions for their gas maintenance and repair requirements.

In July 2010 Graphite Capital led the £45 million management buy-out of Teaching Personnel, the UK’s third largest provider of supply teachers and support staff to schools.

Through its national branch network, Teaching Personnel supplies fully vetted teaching staff to cover both long-term and short-term critical needs. Its sophisticated IT systems and candidate base allow it to match the abilities of its candidates with the specific requirements of each school, thereby insuring that needs can be satisfied in a timely, professional and consistent manner.

Since Graphite’s investment three further branches have been opened.  In August 2011, Teaching Personnel acquired Protocol Education, a large competitor, creating the UK’s leading education recruitment specialist. Teaching Personnel and Protocol Education are ideally positioned to serve the evolving education supply market and will continue to expand their product and service offerings.

In June 2006 Graphite led the management buy-out of The Groucho Club, the UK's best known arts members' club.

The club is based in the Soho area of London, where it was founded in 1985. Its members are prominent in areas such as film, art, music and politics. As the original arts members’ club, the Groucho Club has a high-quality and loyal membership base that offers a resilient business model.

Since Graphite’s investment, the site has been partially redesigned and fully refurbished across all areas, including an upgrade of all bedrooms, modernisation of the dining areas and addition of a terrace. Substantial investment has been made in strengthening the brand, preparing it for further expansion and roll-out. The Groucho continues to attract high-profile members and has a significant waiting list.

In July 2007 Graphite backed the £22 million management buy-out of The Third Space, one of London’s premier health and fitness clubs.

The Third Space is a highly regarded operator in the premium segment of the fitness sector with a uniquely integrated approach to health and fitness. Its main site, opened in June 2001, is located in the Soho area of London and comprises a state-of-the-art gym, medical centre and associated retail operations. This site has around 4,000 members with market-leading retention rates.

Under Graphite’s ownership the Soho site has continued to grow strongly, developing its service offering and attracting new members while retaining existing ones. In April 2011 the company opened its second site at an up-market hotel in the Marylebone area of London funded with further investment from Graphite. From 2012 the Soho site is expected to further benefit from a significant redevelopment within the surrounding area (the Quadrant Development), where premium office, retail and hotel facilities are being created.

In May 2006 Graphite Capital led the £27 million management buy-out of TMP Worldwide, the UK’s largest recruitment advertising agency, from the company’s American parent, Monster Worldwide.

TMP provides clients with a wide range of resourcing solutions of which the design and management of recruitment advertising campaigns is the most important. Other services include response management, candidate assessment and graduate communications. The business has long-standing relationships with over 1,400 customers, including FTSE 100 companies, local councils and central government agencies. TMP employs almost 300 staff in seven offices throughout the UK and Ireland.

Since Graphite’s investment the senior management team has been strengthened significantly. The company has also made considerable investment in upgrading systems, facilities and office premises to increase productivity and improve client service. In February 2011 TMP acquired the advertising and recruitment process outsourcing businesses of Tribal Resourcing, a competitor focused on public sector recruitment. This acquisition has further enhanced TMP’s profile in the public sector.

In September 2010 Graphite led the £130 million buy-out of U-POL, a leading independent manufacturer and distributor of branded automotive refinishing consumables.

U-POL manufactures and markets refinish products (primarily body fillers, coatings and aerosols), for the global automotive aftermarket. The company has an enviable reputation for product quality and innovation, which is the key to its global success. U-POL is the market leader in the UK and has strong, growing positions in the US, China and other overseas territories.

Since Graphite’s investment a new chairman and commercial director have been appointed, bringing with them a broader strategic vision and previous experience of working for larger, global competitors.  In addition, the company has invested significantly in its finance function, including the implementation of new financial information and reporting systems. It has also recruited overseas sales personnel to facilitate further international expansion. A new warehouse has been opened to allow the business to meet the continued strong demand for its products. 

Graphite has provided £35 million of development capital to Willowbrook Healthcare, alongside £43 million of bank debt, to enable it to build and acquire 14 care homes. Willowbrook was set up in October 2008 as a successor company to two previous Graphite investments, Avery Healthcare and Optimum Care, both of which had the same management team.

Willowbrook’s homes and the care provided to residents are of the highest quality. The aim is to be the home of choice in a given catchment area. As a result, high occupancy and attractive fee rates are achieved, delivering a strong financial performance.

Ten homes are now open, with a further four scheduled to open in the next few months. Willowbrook will have developed eight of these 14 homes and acquired six others. Profits are growing rapidly as the new homes mature. Underlying demand is strong due to demographic trends and the need for better quality care homes in the UK.