Exponent Private Equity & Electra Partners Announce the Proposed Acquisition of Photobox Group


Photobox Group, Europe's leading digital consumer service for personalised products and gifts and parent of the PhotoBox, Moonpig, PaperShaker, Sticky9, Hofmann, Posterjack and posterXXL brands, is pleased to announce that it has received an offer from Exponent Private Equity ("Exponent") and Electra Partners to purchase its entire share capital.

Under the terms of the offer, Exponent and Electra Private Equity PLC² would be the principal shareholders, with Photobox Group management team reinvesting part of their proceeds.

The current Photobox Group executive management team, led by Stan Laurent, would continue in their roles. The offer is subject to certain conditions including consultation with employee representatives and anti-trust clearance.

This proposed transaction would provide Photobox Group with a new simplified and committed shareholder structure as it continues to diversify its product and gift range, enhance its mobile proposition, accelerate its organic growth internationally and further strengthen its European leadership position.

Exponent and Electra Private Equity PLC[2] would replace, both as owners and board members, current longstanding shareholders and partners in the development of Photobox Group. Those longstanding shareholders include Highland Capital Partners, Index Ventures, HarbourVest Partners, Insight Venture Partners, Quilvest Ventures and Greenspring Associates: some of whom have been involved in the business for ten years and have supported its growth to date.  

Some of Photobox Group's key achievements include:

  • Significant double digit year-on-year growth since foundation: rapid and constant development, with revenues growing 20x to £275m (pro-forma in the last 12 months) in the past ten years
  • Strong customer base: 19 million orders fulfilled in the last twelve months across Europe underpinning healthy growth, with approximately two thirds of Group revenue from repeat customers
  • Innovation, a constant booster of development: increased product offering both organically and through acquisitions as the business expanded from its roots in photo prints to full product ranges in the photobook, stationery, home décor, cards, and gifts segments
  • Commitment to mobile: enhanced mobile platforms for all brands, resulting in the share of mobile orders now reaching a significant double-digit figure for the Group. Moonpig has now become predominantly mobile with 50% of transactions now undertaken on mobile devices
  • Successful M&A strategy: three significant acquisitions in the last five years, including the UK's leading online card retailer, Moonpig (2011), to diversify brand and product portfolio; Hofmann (2014) and posterXXL (2015) to strengthen footprint in some of the largest European photo markets
  • Rapid expansion in Europe and beyond: market leading positions in UK, France, Spain and Germany with 57% of Group revenue generated outside the UK

​Speaking about the proposed acquisition by Exponent and Electra Partners, Photobox Group's Chief Executive Officer, Stan Laurent, commented:  

"We have made great headway with the support of our longstanding shareholders, Board members and employees, who have taken us from humble beginnings to create the European leader in this market. But with a market opportunity of £6 to £7 billion in Europe alone, our story is only just beginning. 

"We're excited that Exponent and Electra Partners, both with impressive track records of building great businesses, share our vision about continuing to develop the most "personal" e-commerce business in Europe, celebrating millions of customers' memories, birthdays and other happy moments. Their welcome cards are in the post!" 

Douglas McCallum, Photobox Group's Non-Executive Chairman, added: 

"This is a case of 'great business meets great investors.'  I'm honoured to continue to participate in the Photobox Group story as we endeavour to expand on our European leadership position in the exciting world of personalised products."  

Simon Davidson, Partner at Exponent Private Equity, said: 

"We were attracted to invest in Photobox Group because it is the European market leader in the growing personalised photo products and gifts market. Its brands such as PhotoBox, Moonpig, Hoffman and PosterXXL are growing, profitable businesses with high consumer awareness. Exponent has an excellent track record of investments in the digital space, and in partnership with the management team we intend to continue the growth by winning new customers and by innovating and broadening the product set for our large existing customer base." 

Bill Priestley, Partner at Electra Partners, said:  

"We are delighted to mark Electra's first investment of its 30 September 2016 financial year by investing alongside Exponent in this exciting business. Photobox is the market leader in Europe and is uniquely placed due to its scale to capture further growth as the macro trend for personalised gifts continues. We look forward to working with Exponent and the Photobox management in driving the business forward to its next stage." 

Fergal Mullen (Highland Capital Partners) and Neil Rimer (Index Ventures) added: 

"On behalf of all current individual and institutional shareholders, some of whom have supported PhotoBox and Moonpig for ten years, we have mixed emotions about the proposed exit from the business but we do so with a tremendous sense of pride in the achievements of the management team.  Photobox is a clear European market leader and an example of what can be accomplished when a world-class management team is supported by strong investors and a balanced board of directors.  We are certain that Exponent and Electra Partners will perpetuate the same ethos of partnership with the management team enabling them to achieve even more in the years ahead as Photobox further consolidates its leadership position in Europe." 

Photobox Group was advised by Goldman Sachs International, EY and Herbert Smith Freehills LLP.

Exponent and Electra Partners were advised by Evercore, Allen & Overy, OC&C Strategy Consultants, KPMG and Shearman & Sterling. Financing will be provided by JP Morgan.

About Photobox Group 

The Photobox Group is Europe's leading digital consumer service for personalised products and gifts and parent of the PhotoBox, Moonpig, PaperShaker, Sticky9, Hofmann, Posterjack and posterXXL brands. From photobooks and unique artwork to the very latest personalised apparel, gifts and greeting cards, the Group's products enable customers across 22 countries to share memories, celebrate great moments and inject personal expression into their everyday lives. The Group has 1,000 employees across Europe and generated turnover of £215.3m in the fiscal year ending April 2015.

About Exponent Private Equity 

Exponent is a private equity firm which invests in market-leading businesses headquartered in the UK and Ireland.  Its aim is to unlock value and drive growth in its portfolio companies.  Earlier this year Exponent raised £1 billion of capital for its third fund, which is the largest single country fund in Europe. 

The company's current portfolio includes: Big Bus Tours, the largest operator of open-top sightseeing bus tours in the world; Immediate Media, the award-winning special interest content and media platform business; and Fintrax, a leading global provider of VAT refund and dynamic currency conversion services.  Exponent has exited nine of its investments to date, most recently Quorn Foods and thetrainline.com.

About Electra Partners 

Electra Partners is an independent private equity fund manager with over 25 years' experience in the mid-market. During the last 25 years it has invested in excess of £4.5 billion in over 200 deals. As at 31 March 2015, the firm had funds under management of over £1.6 billion including capital available for new investment of nearly £400 million.

Electra Partners' flexible investment strategy allows it to invest broadly across the private equity market with a particular focus on Buyouts and Co-investments, Secondaries and Debt. In addition to this, its long-term capital base means it is not constrained by expiring investment periods or exit pressure driven by fund raising cycles and is therefore able to realise investments only when returns are maximised for its investors.

The firm's major client is Electra Private Equity PLC ("Electra"), a private equity investment trust which has been listed on the London Stock Exchange since 1976. Electra's long-term investment performance has been consistently superior to private equity and other benchmarks. Over the ten years to 31 March 2015, Electra has seen diluted NAV per share growth of 251%. This is over five times the NAV per share return of the Morningstar Private Equity Index (ex. Electra). It is also equivalent to a ten-year annualised return of 13%, at the upper end of Electra's target range of 10-15% over the long-term.

For further information please visit http://www.electrapartners.com .

Electra Partners LLP is authorised and regulated by the Financial Conduct Authority.


1. Electra Partners refers to Electra Partners LLP, acting on behalf of its client Electra Private Equity PLC

2. Electra Private Equity PLC is the listed private equity investment trust of which Electra Partners is Manager

In this post: PhotoBox

Published — Oct. 20, 2015