38 Tuesday May 24 2022 | the times
Business
Moonpig is expanding its orbit from
selling greeting cards to memories,
with the £124 million purchase of two
pioneers of the trend for buying experi-
ences as gifts.
The cash acquisition of Buyagift and
Red Letter Days from Otium Capital,
the family office of Pierre-Edouard
Stérin, 48, the French technology
entrepreneur, will provide a platform
for Moonpig to expand into a rapidly
growing market valued at £6 billion a
year.
Between them, the brands offer
4,800 experiences built up over 20
years, ranging from afternoon tea at
Harrods to a day racing sports cars on
the Top Gear test track.
Nickyl Raithatha, 38, Moonpig’s
chief executive, said there was evidence
of a “long-term shift, particularly
among millennials, away from physical
gifts towards memorable experiences”.
The deal is Moonpig’s first acquisi-
tion since its £1.2 billion listing in
February last year. Despite five up-
grades since floating, Moonpig shares
recently have been changing hands for
less than half the 487p peak achieved
when the pandemic closed high street
stores. The shares rose by 26¼p, or
11.2 per cent, to close at 261¼p last night.
Buyagift has more than three million
customers and delivered earnings
before tax and interest of £14 million
from revenue of £44 million in the last
T
he American
private equity
firm that jolted
Ted Baker into a
formal
sale process is no longer
in the running to buy it
after the fashion brand
chose a rival suitor
(Ashley Armstrong
writes).
Ted Baker began an
auction last month after
saying it had rejected two
takeover approaches from
Sycamore Partners — the
last at 137½p a share,
which would have valued
the brand at £254 million.
The sale process has since
attracted interest from
others, including
Authentic Brands Group,
which industry sources
say is the likely favourite.
Ted Baker confirmed
Sycamore was no longer
participating. It said it had
received “a number of
revised non-binding
proposals” and the board
had selected a “preferred
counterparty to take
forward”. It said there was
no certainty on whether
an offer would be made.
The shares fell 1¼p, or
0.9 per cent, to 138p.Ted Baker
turns away
from bidder
Gifting firms add to
Moonpig experience
financial year. Red Letter Days was
bought out of administration by Peter
Jones, 56, and Theo Paphitis, 62, the
entrpreneurs and Dragons’ Den stars,
who sold it on to Stérin’s Smartbox
Group in 2016.
The deal will be funded through cash
reserves alongside £60 million of addi-
tional revolving credit and is expected
to be completed by the end of July, with
Moonpig adding the company’s 200
employees to its 500-strong workforce.
It increased its margin guidance for the
current financial year to a market-
leading range of between 25 per cent
and 26 per cent and expects annual
group revenues to rise to £350 million.
Raithatha believes the market for
greeting cards to be “highly resilient”,
despite the cost-of-living crisis. As well
as “compelling” financial benefits,
particularly from sharing of the data
that drives save-the-date reminders
and gift recommendations, he sees the
purchase as aligning with his broad
philosophy for the company.
David Reynolds, at Davy Research.
the broker, said the acquisition repre-
sented a “good deal at reasonable
terms. While capital markets’ senti-
ment around digital has been univer-
sally negative year-to-date, the ‘good’
businesses crack on with growing and
advancing competitive advantage.”
Citi, the investment bank, noted risks
around data regulation and increased
postal costs, but said the deal was “com-
pelling” for investors.Simon Freeman