Raising Finance

GO Outdoors sales generates 40x return for early investor

3 min read

28 November 2016

Former editor

Outdoor clothing and equipment business GO Outdoors has been sold to JD Sports Fashion for £130m, providing a large realisation for its private equity backer.

Having initially invested in GO Outdoors back in 1998, YFM Equity Partners has secured a £23m share of the sale to JD Sports Fashion.

The private equity firm first backed GO Outdoors when it had one shop in Sheffield, and has been an investor as the business grew to 58 sites, 2,000 staff and a turnover of £200m.

YFM has revealed that the sale equates to a 40x realisation, when combined with a partial exit completed in 2011. A minority stake was sold to fellow private equity firm 3i in 2011, producing a return of £6.5m – after which YFM still held a 14 per cent stake.

Paul Cannings, director at YFM, said that he and the team were “delighted” to see GO Outdoors take the next step in its development and growth.

“We have been involved with GO Outdoors and the management team throughout its journey from one store to market leader, with an open supportive relationship that has allowed the business to flourish,” he added.

New acquirer JD Sports Fashion is listed on the London Stock Exchange (LSE) and has a turnover of around £1.5bn. At the same time the deal was announced, JD Sports Fashion decided to create sub-division of its existing ordinary shares of 1.25p each into five new ordinary shares of 0.25p each. Having being approved by investors at a general meeting last week, this sub-division has now become effective. According to a spokesperson for JD Sports Fashion, the reason for the sub-division is to reduce the company’s share price to a level where smaller-sized dealings in the shares would be more efficient and may improve liquidity and marketability of the company’s shares.

Chris Matthews, GO Outdoors chief executive, commented: “I would like to personally thank YFM, for their active involvement, strategic advice and continued support which, in partnership with our exiting founders John Graham and Paul Caplan has helped to grow GO Outdoors into the UK’s largest outdoor retailer.”

YFM’s David Hall said the investment is the firm’s best to return to date. It follows on from others including an 8x return on President Engineering, 5x return on Waterfall Services and means YFM has produced an average 3x return on its last 29 exits.