Cavendish

Cavendish announces the sale of Greetings Direct Group to Flying Brands for £12m

Cavendish are pleased to announce the sale of the Greetings Direct Group, a direct marketing business that sells a range of greetings cards, to Flying Brands Plc, one of the UK's leading direct marketing companies. Greetings Direct is the first and only greeting card company in the UK which operates in the direct marketing field using a continuity marketing model. The company has an approximate 1% share of the UK greeting card market.

In the year to 31 August 2005, Greetings Direct, which in the current year will send out over 15 million greetings cards, had revenues and EBIT of £8.5 million and £1.2 million respectively. The sale consideration of £12 million represents a historic EBIT multiple of 10 times.

Greetings Direct, which trades in the UK, Republic of Ireland and shortly in Holland, was established in 2002 by its founder and Managing Director, Mårten Nilsson. Mårten will continue as Managing Director of Greetings Direct and the other seven members of staff will all remain with the business post acquisition.

The shareholders of Greetings Direct appointed Cavendish to manage the sales exercise and identify suitable purchasers that could deliver the right value and, at the same time, provide an excellent home for the business.

Mårten Nilsson commented: ''The sale of our company to Flying Brands provides an exciting opportunity for the business and its team of dedicated staff. Whilst achieving the right price was a key objective, we are delighted that the new owners provide the infrastructure and opportunities for the existing team to grow the business in the coming years. We worked closely with Cavendish who provided expert knowledge of the sale process with which we were not familiar. We were delighted with the results and look forward to a strong and exciting relationship with Flying Brands in the coming years.''

Mark Dugdale, Chief Executive of Flying Brands commented: ''This acquisition fits our ongoing strategy perfectly. Greetings Direct has grown strongly since it was established in 2002 and has the potential to continue this growth both in the UK and in other markets. There are excellent synergies with our existing databases for cross selling products, which, combined with good cash generation and a strong management team, should continue to enhance our overall value.''

[Paul Herman], who lead the transaction at Cavendish commented: ''We are delighted to have realised value for the exiting shareholders of Greetings Direct. Understanding their objectives at a very early stage in the process allowed us to focus on the types of purchasers that would have been acceptable to them. We are delighted to have concluded the deal with Flying Brands, who were one of a number of both domestic and international parties that showed their interest in a deal from the outset. We have worked closely with the shareholders through an extensive due diligence process and are delighted to have completed the deal with a buyer with such a compelling commercial fit.''

Legal advice on the transaction was provided by Grundberg Mocatta Rakison LLP, who advised the vendors and Pinsent Masons who advised the Purchasers

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