Cruise and ski specialist online retailer Iglu will use investment from new private equity backer LDC to target acquisitions, with long-haul travel in its sights.
LDC, part of the Lloyds Banking Group, came in as minority stakeholder in the Wimbledon-based business last week, replacing former backer Growth Capital Partners which invested in 2012.
Iglu founder Richard Downs, who along with other managers at the company retains a majority interest in Iglu, said the buyout of Planet Cruise in 2013 showed the firm was capable of growth through acquisition.
Although a cruise specialist, Planet has brought significant land-based long-haul expertise into the business and it is in this area that Iglu sees growth.
“We have proved our systems are capable to go multi-platform. We see ourselves as high-tech, high-touch, where we can create a smooth customer journey.”
Managing director, Simone Clark, added: “The acquisition of Planet was transformational. We were able to demonstrate we can take a business and show significant growth over two years.”
Clark said Iglu would be looking to buy companies that compliment what it already does.
“We have already started to grow in long-haul organically through the Planet brand. What was attractive in the Planet Cruise buyout was we were a trade buyer,” she said.
Iglu plans to build up a web development team at Planet’s Portsmouth base and has recently recruited a new operations director from Wiggle.
Acquisition targets are expected to be in the £30 million to £50 million turnover range and Iglu will also be looking to break into overseas cruise markets by buying businesses.
The LDC deal is understood to have valued Iglu at £60 million, the company having doubled turnover (total transaction value) to £174 million over the past three years.
Downs said LDC was chosen from among a number of suitors because it has a longer-term investment perspective than the usual three years most private equity houses look for.
“LDC is keen for the current management to run the business. Mergers and acquisitions are part of the growth strategy and LDC has a long term investment horizon,” said Downs.
“We actually quite like the ideal of a longer run, particularly if we are looking to make acquisitions.”
LDC is Iglu’s fourth private equity backer, having initially been backed by Barclays Ventures, then Matrix and Growth Capital Partners.
Downs said having such a succession of private equity backer is unusual in the UK but not so in the US which has a more sophisticated private equity market.
“Over here there are fewer companies that go through the whole process of angel investors to first round, second round and third round often because management want to sell out.
“The LDC deal reflects the fact that the management is sticking around and is wanting to move the business on.”