Leon Hughes is a former director of ecommerce at sports-nutrition business Maximuscle. In January he joined private equity firm Piper to build on the company’s investments in direct-to-consumer businesses including Boden, Maximuscle, Diet Chef and Celtic Sheepskin.
Small companies seek investment for a number of reasons: either to fund growth, expand internationally or restructure investment—enabling them to replace existing shareholders and/or realise some value for themselves. Once the decision has been made to take a business to the next level, it’s critical to sense check and ask the obvious question: will anyone invest?
If the company is ethical in performance, demonstrates solid growth, has a compelling or differentiated consumer or b-to-b offering and an effective management team with succession, then the simple answer is “Yes”. Private equity houses are often targeted as they have a clear objective: to invest in a company and support the management team in its strategy to build the brand’s vision and goals.
During my time as director of ecommerce at sports nutrition brand Maximuscle, I helped establish the online and IT infrastructure and witnessed the company transform from a small player to market leader, with total revenues rising from £7 million to £40 million.
Maximuscle was sold three times during this period--twice to private equity investors--and every time, the online due diligence process undertaken by investors became more essential and more rigorous. With etailing growing rapidly and essential for consumer acquisition and expansion abroad, there is an ever-increasing focus on ecommerce, resource, infrastructure and scalability. This was certainly the case at Maximuscle.
Today I’m on the other side of the fence at Piper, the specialist investor in consumer brands and one of the private equity houses that invested in and later exited Maximuscle. It has also backed a number of other direct and online consumer businesses, including Boden, Gray & Osbourn, Diet Chef and Celtic Sheepskin.
Part of my role at Piper is to look for and diligence prospective new investments--essentially to open the bonnet of businesses and check everything is working efficiently. So what is the best way to ensure your own company is firing on all cylinders should you be seeking support for your next stage of growth?
...Find out in the May issue of Direct Commerce!
The next edition of Direct Commerce magazine will feature more advice from Leon Hughes on how to make your business attractive to investors. To subscribe and ensure you receive your copy, click here or email firstname.lastname@example.org.
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