Canburg – owner of luxury furniture businesses Smallbone of Devizes and Mark Wilkinson Furniture – has secured an £8 million capital investment from Business Growth Fund (BGF), on of the UK’s most active growth capital investors, which in doing so will see it take a minority stake in the business. allowing it to accelerate UK and international expansion.
The deal is reported to create up to 40 jobs at the group’s UK showrooms and its workshop in Devizes, Wiltshire. Further jobs will be created overseas in the future.
British entrepreneur Leo Caplan purchased Smallbone and Mark Wilkinson in 2009 and has so far committed more than £10m to the businesses, enabling them to return to profitability and following a successful restructuring programme, the group made profits (EBITDA) of £2.1m from sales of almost £30m in the 12 months to June 30, 2013. The company says profits are expected to have increased to over £3m (EBITDA) in the year to June 2014.
Growth capital investor BGF was established in 2011 with up to £2.5 billion to invest and a mandate to support the growth of British smaller and mid-sized businesses. The company makes long-term equity investments of between £2m and £10m in businesses with the potential for growth and in turn receives a minority stake and a seat on the board. It is backed by five of the UK’s main banking groups, but is a fully independent organisation.
“This is a really exciting time for Canburg,” said chief executive Leo Caplan. “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 £50m (post investment) to a global luxury group worth in excess of £500m.”
Paul Oldham, regional director 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 Canburg group has multiple routes to market, selling directly to high net worth customers through showrooms, in partnership with in-market dealerships, as well as selling to developers of luxury properties in leading locations such as New York City.
The heritage and prestige of the group has resonance with discerning customers throughout the world and since 2009, the group has substantially grown its presence in North America and the Middle East, and in doing so winning prestigious contracts for luxury apartment developments that include ONE57, the most expensive residential building in New York overlooking Central Park (135 apartments ranging from $17 million to $115 million), Walker Tower Chelsea New York (52 apartments ranging from $8.5 million to $60 million) and 530 Park Avenue New York (100 apartments ranging from $3 million to $25 million).
The group now generates a third of its sales from international customers, who are attracted by inspirational design and British craftsmanship and Canburg’s performance in international markets resulted in the company receiving endorsement from the Minister for Trade and Investment, Lord Livingston.