9 Apr 2010 17:02
9 April 2010
BETTER CAPITAL LIMITED
ACQUISITION
Better Capital Limited (the "Company") is pleased to announce that BECAP Fund LP (the "Better Capital Fund") has completed a second acquisition.
The Company has today been informed of the acquisition of the trade and assets of The Reader's Digest Association Limited (in administration) and its main subsidiary (together "Reader's Digest UK") by a special purpose vehicle, which is majority owned and controlled by the Better Capital Fund. The investment backs the Reader's Digest UK management team, who will take 35% of the equity in the new company.
Reader's Digest UK is a direct marketing business selling books, music CDs, DVDs and other products to its customer base of over 600,000 individuals. It also publishes a monthly magazine which is sent to nearly half a million subscribers and regularly operates prize draws for large sums of money.
Although profitable historically, Reader's Digest UK faced a number of issues, including the funding of its defined benefit pension scheme (as has already been widely publicised) and as a result the directors filed for administration on 17 February 2010.
The trade and assets were acquired from the Joint Administrators, being Philip Sykes, Jeremy Willmont and William Beach of Moore Stephens LLP. The assets acquired had a book value of £7 million at 31 March 2010. Following the transaction the new company will have no bank debt.
Unaudited net revenues for the year to 30 June 2008 were £85 million, with an operating loss (pre exceptional items) of £1 million.
BECAP anticipates committing a total of £13 million to finance the transaction and fund future growth, injected in a combination of equity and loan stock yet to be finalised.
Sean Cooper, a member of Better Capital LLP (which provides consultancy services to Better Capital Fund's general partner) will join the board of the acquisition vehicle.
Enquiries:
Better Capital Limited +44 (0)14 8171 6000
Mark Huntley (Director)
Laurence McNairn (Administrator and Company Secretary)
Better Capital LLP +44 (0)20 7812 7240
Jon Moulton (Chairman)
Numis Securities Limited +44 (0)20 7260 1000
Nominated Adviser: Simon Blank
Corporate Broker: Nathan Brown