The sale of Findel will simplify the group’s operations, secure the future of Studio Retail and and allow management to strengthen the business.
Findel Education has been sold to management in £30m cash deal. The business has been sold to West Moorland 221 Ltd, a newly-formed company owned by investment funds managed by Endless. In addition to the acquisition price, the group has made available a working capital facility of £2m to Findel Education.
The net cash proceeds will be used to make a voluntary payment to Studio Retail Group’s defined benefit pension fund of £9m, with the remainder used to reduce group net debt. The disposal will allow the management team to focus on the rapidly expanding Studio business.
Following a transformational year for Studio, the group intends to continue to pursue and accelerate its strategic vision of becoming the leading online value retailer with an integrated financial services offer.
Speaking of the deal, Studio Retail Group CEO Paul Kendrick, said: “Under SRG’s ownership, Findel Education has transformed itself from a catalogue retailer to an online first business, and we are confident that it will continue on the next phase of its digital transformation under the ownership of Endless. We are thankful to all of our colleagues at Findel Education for all their hard work and wish them all the best for the future.”
Findel will be managed by managing director Chris Mahady, deputy managing director and chief financial officer Mark Whittaker, and chief techology officer Martin Jones.
Studio Retail Group also said the sale concludes the company’s strategic review which was announced last December. It confirmed that the group is no longer available for sale, although the board received multiple offers to acquire its educational resources business, resulting in today’s deal.
In a separate trading update today, Studio Retail Group said its final quarter was “exceptionally strong”, with sales 88% ahead of the prior year, and gross margin rates 650% higher than the equivalent period last year. This performance contributed to sales growth of 43% for the full year, with gross margin rates up 290% year-on-year, a record breaking performance.
The board added that government support in relation to the Covid-19 pandemic was either repaid or not claimed and had no impact on profitability. Studio’s total customer base of 2.5m is up 36%, with more than 1.5m active credit account customers, up 15%. A spokesperson said Studio Retail is now in a position to evaluate a range of options to continue to grow the business and enhance shareholder value.
CEO Paul Kendrick added: “We start the new financial year from a position of focus and strength, with the growth in our customer base demonstrating the success of our leading online value retail and integrated financial services offer.”