Yorkshire and North East Dealmakers Guide 2016 - 31

DEAL SHOWCASE Leeds-based private equity firm KCP's investment in Gear4Music, the York-based online musical instruments business, has helped the company to achieve spectacular growth and led to a successful IPO. Making a noise online A £3.4 million investment by Key Capital Partners (KCP) in Gear4Music in 2012 has helped the company to become the UK's leading online musical instrument retailer. The deal, which saw KCP take a 30% shareholding and a seat on the board, has led to sales growing from just £10 million four years ago to close to £50 million. The investment was used to buy out an angel investor and to provide the company with the financial firepower to drive the next stage of its growth and development. Specifically, it enabled Gear4Music to invest in stock, build 19 European websites and to appoint both a finance director and a commercial director to help CEO Andrew Wass swiftly move the business forward. As is quite typical with businesses of this size, since founding the company, Andrew had been responsible for almost everything within it, but had come to realise that if Gear4Music was to continue to grow, he needed some management support. KCP's investment also enabled the business to relocate to a 135,000 square foot warehouse and head office in York and to create a state-of-theart showroom. The creation of an international e-commerce platform resulted in impressive sales growth, helping Gear4Music achieve a T: 0113 280 6400 Peter Armitage, Partner The transformation of Gear 4Music since our investment has been quite spectacular was a massive support, providing sound advice and guiding us through the float process." The transformation of Gear4Music since our investment has been quite spectacular. Most of this is, of course, down to Andrew Wass and his management team, but it is very satisfying to have been a part of that success and to have provided the investment catalyst. We are now on the lookout for similar investment opportunities where we hope to work the same magic. successful IPO in June 2015, valuing the business in excess of £28 million. The float raised further finance enabling it to continue on its growth curve with sales currently up by 66% on the previous year. Gear4Music CEO Andrew Wass, said: "Securing the backing of KCP has certainly played a key part in our success. Not only did it enable us to expand our online offering throughout Europe, it put us in a strong position to launch a successful IPO. Having the input of such experienced investors E: Peter.armitage@keycapitalpartners.co.uk W: www.keycapitalpartners.co.uk 31 http://www.keycapitalpartners.co.uk http://www.keycapitalpartners.co.uk

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