Brighton-based GAK is an independent, omni-channel retailer of musical instruments in the UK and Europe. Founded on a market stall in 1992, the business has grown into one of the most prominent and recognisable brands in the industry. It supplies a wide range of guitars, amps, drums, keyboards and music production software, having built strong relationships with the industry’s leading suppliers and manufacturers including Fender, Yamaha, Roland and Gibson. Two thirds of the company’s revenue is now generated online. After 25 years, the founder and majority shareholder were looking to realise the value of the company and find an investor to back the Co-Managing Directors and minority shareholders, who had been running the business for the past five years, through the company’s next phase of growth. FRP was engaged to run a full sales process to find a potential buyer, including both trade buyers and private equity.
FRP’s Corporate Finance team identified the top trade buyers and private equity options, prepared a detailed information memorandum, and made initial confidential approaches to an agreed list of buyers to identify potential appetite. The team facilitated buyer meetings with the management team, reviewed all financial forecasts, and managed communications and negotiations with the preferred bidder, as well as liaising with and assisting lawyers and other professional advisers. Having identified the best exit route for the client, we were able to provide guidance and significant support to the internal finance team throughout the transaction process, deliver on the deal expectations for the main shareholder and the management team, and ensure the swift completion of the banking and legal process despite short turnaround times.
The business is now preparing for a period of growth, having been acquired by Co-Managing Directors Max McKellar and Ian Stephens, with investment from Risk Capital Partners. The vendor-led management buyout (MBO) provides the new owners with the ideal platform to drive the growth potential of the business in the short to medium term. Since the Co-Managing Directors were appointed, revenues have grown by more than 50 per cent, with sales on track to exceed a record £40 million in the current period. GAK’s Founder has retained a stake in the company and will continue to advise the management team in a consulting capacity.
“I’m delighted with the outcome of the deal. FRP was excellent throughout the whole process in identifying the right partner for the company for its next phase of development, and was instrumental in getting the deal across the line.” Gary Marshall, Founder of GAK.
GAK’s sales are set to exceed a record £40 million in the current period.