Kester Capital, a leading UK lower mid-market private equity firm, today announced that it has signed an agreement to sell its portfolio business, Jollyes Retail Group Limited (“Jollyes”), to TDR Capital. Jollyes is the second largest and best value pet retailer in the UK.
Under Kester Capital’s ownership since 2018, Jollyes has undergone a significant transformation and is now one of the fastest growing physical retailers in the UK:
- Jollyes’ network of stores has expanded from 64 to 100
- Jollyes has more than doubled its employee base to over 1,200
- Jollyes has consistently delivered market-leading, double digit like-for-like growth
- Revenue and profit have more than doubled since Kester Capital invested
Jollyes’ strong financial performance has been underpinned by its differentiated proposition – a focus on value and customer service – and the positive long-term fundamentals of the UK pet retail market in which it operates.
The sale of Jollyes delivers a return on Kester Capital’s investment of 4.2x and an IRR of 29%. This represents Kester Capital’s third consecutive exit over 4x and the seventh consecutive exit over 3x.
Adam Maidment, Managing Partner at Kester Capital, said: “I’m incredibly proud of what we have achieved with Jollyes. We have doubled the workforce, doubled the revenue and more than doubled the profitability, building one of the largest specialty pet retailers in the country. It’s a great success story and exactly the kind of value creation story Kester is about.
“It has been a pleasure to work alongside Joe, Richard and the wider team over the last six years. We wish the management team and the business every success for the future.”
Joe Wykes, CEO of Jollyes, said: “Kester Capital has been a strong partner for Jollyes over the last six years, and an invaluable adviser to me since I joined.
“We have valued their expertise and guidance as we accelerated our growth plans, and are grateful for their support and the foundation they’ve built for the next chapter in our story.”
During its investment period, Kester Capital recruited a high calibre management team, led by CEO Joe Wykes and Chairman Richard Cotter, who have overseen a broad programme of repositioning and operational improvement. This is reflected in: a loyalty programme with market-leading participation rates; a material expansion in Jollyes’ own brand offering; the roll-out of veterinary and grooming services across the store estate; and maintaining a Trustpilot score of 4.8, well ahead of peers. The business also completed a number of bolt-on acquisitions to supplement organic growth and transitioned to central distribution under Kester Capital’s ownership.
TDR Capital’s investment, alongside reinvestment by management, will enable Jollyes to continue its success as an independent business.
Kester Capital was advised by Houlihan Lokey (M&A), PwC (financial and tax) and Osborne Clarke (legal). TDR Capital was advised by HSBC and Barclays (M&A), PwC (financial and tax) and CMS (legal). Management was advised by Jamieson (financial), Blick Rothenberg (tax) and Osborne Clarke (legal).
The transaction is expected to close in March.
