Capital investor Business Growth Fund (BGF) takes minority share
Parent company of luxury furniture brands Smallbone of Devizes and Mark Wilkinson Furniture, Canburg has secured £8million investment from capital investor Business Growth Fund (BGF) for a minority stake. It will allow Canburg to create up to 40 jobs at the company’s headquarters in Devizes, Wiltshire adding to the existing 170 positions, with further jobs created overseas.
CEO Leo Caplan established Canburg in 2009 to purchase Smallbone and Mark Wilkinson Furniture. The British entrepreneur committed more than £10million, which enabled the company’s to return to profitability. Following a restructure, the group EBITDA was £2.1million from sales of almost £30million in the 12 months to June 30, 2013. Profits are expected to have increased to more than £3million EBITDA in the year to June 2014.
The group has multiple routes to market, selling direct to high net worth customers through showrooms, in partnership with in-market dealerships, as well as selling to developers of luxury properties, including overseas. It numbers celebrity clientele including Michel Roux Jnr, who was at the recent launch of its Portobello collection, and Lisa Snowdon.
Leo Caplan commented: “This is a really exciting time for Canburg”. He continued: “I first invested in these businesses because of my passion for the luxury furniture they both make. The fact that the furniture is hand made in the UK and supplied globally is a fantastic testament to our cabinet-making heritage. I have inherited a love of timber as my grandfather was a timber merchant. Canburg is proud of its highly-skilled workforce, many of whom have been with the company for decades.
“I started considering the strategic options for the group almost a year ago after being approached by prospective buyers, and instructed Cavendish Corporate Finance to assess these. I wasn’t looking to sell but started exploring how best to take the business to the next level. The process reminded me why I fell in love with these companies in the first place and the fantastic opportunities that are available. Perhaps most exciting are the opportunities overseas, where Canburg already generates a third of its revenues thanks to the reputation we have gained with customers in the US and elsewhere.
“I am delighted that in BGF we have found the perfect long-term partner to help us reach our full potential and create the value that clearly exists in this business. I am confident that, over the next five years, we can grow the business from its current valuation of over £50 million (post investment) to a global luxury group worth in excess of £500 million.”
Regional director, Paul OIdham, at BGF, said: “Smallbone and Mark Wilkinson Furniture represent the highest standards of British design and manufacturing, which are held in high esteem all over the world. Leo and his management team have very successfully capitalised on this, building an impressive international reputation and broad customer base. They have looked to BGF to put investment behind their ambition to create a truly global business; we share this vision and over the next few years fully expect to see Canburg take a dominant role among a select group of successful British design and manufacturing businesses operating on the international stage.
“Too often we see UK entrepreneurs sell out of their businesses prematurely – before they have really achieved full potential. This does not have to be the case as Leo and his team at Canburg are demonstrating. It is in these situations that BGF investment can make a difference, helping entrepreneurs to realise their ambitions in full.”
The investment in Canburg was led by James Austin, Alex Garfitt and Sarah Ledwidge from BGF’s Bristol team.