FLEMING Family & Partners’ private equity arm yesterday announced it had stumped up £8m to take a majority stake in the management buyout of rental furniture provider David Phillips Furniture.
FF&P Private Equity has put up the money to back the deal, which will see current management reinvest in the firm.
FF&P PE said the business, which recently refurbished 130 flats on Arsenal FC’s old football ground Highbury, had “only scratched the surface” of other lucrative sectors, such as the social housing market. It also said it saw “attractive opportunities” for the firm to act as a sector consolidator in the future.
FF&P PE co-head Henry Sallitt said: “The David Phillips business has a huge range of opportunities. The current constraints on the availability of mortgage finance are ensuring that the trend towards rental from owner-occupied is continuing.”
David Phillips expects its current revenue growth rate to accelerate as rented property continues to increase, with sales forecast to grow 30 per cent and surpass £20m for this year.
David Phillips chief executive Nicholas Gill said: “We are very ambitious to continue developing David Phillips into the business that everyone in the company dreams of it becoming.”
Gill added that the FF&P PE tie-up would give it better access to capital to increase its revenue growth rate.
The deal adds another business to FF&P PE’s portfolio, which includes businesses like financial services researcher Defaqto. The private equity house is geared towards investing between £3m and £15m in each new deal.