BlueGem Capital Partners exits The DMC Group to Lion Capital
BlueGem Capital Partners (“BlueGem”) and Lion Capital LLP (“Lion”) are pleased to announce that Lion has acquired Crafts Group Limited (“The DMC Group”) from BlueGem. The DMC Group comprises a portfolio of leading European brands in the needlecrafts space, including DMC, Wool and the Gang (“WATG”) and Sirdar. The portfolio also includes Tilsatec, a leading brand of high-performance technical yarn.
BlueGem formed The DMC Group in August 2016 as a consolidation platform for complementary needlecraft brands, beginning with the simultaneous acquisition of DMC and WATG. BlueGem identified in DMC an unloved and undermanaged company with amazing brand heritage, high-quality products and untapped growth opportunities. The addition of WATG was instrumental to the launch of an intensive rejuvenation program which included product innovation, marketing, PR and social media and e-commerce. In 2017, the acquisition of Sirdar and the opening of a London head office solidified The DMC Group’s position as the European leader in the needlecrafts space, led by blue-chip top managers. In 2018 The DMC Group generated over €90m of sales across 100+ countries.
Marco Capello, Founder and Managing Partner of BlueGem, commented: “We are proud of the rapid and significant business improvements that have been achieved at The DMC Group, where we partnered with a high calibre management team. Thanks to the team’s work, The DMC Group is now the undisputed market leader in an attractive and resilient niche. There remains substantial potential for growth within the company, and we are happy to hand it over to Lion Capital. Thanks to its unparalleled industry contacts and expertise, we believe Lion will successfully add to the business’s strong existing foundations. For BlueGem, the sale of The DMC Group is the first exit from our Fund II’s portfolio and generated a Cash-on-Cash of 2.7x and an IRR of 55%.”
James Cocker, Partner of Lion Capital, commented: “We have followed The DMC Group closely for some time and admire the value creation strategy that the team has implemented under BlueGem’s ownership. The business has a wide array of levers to drive continued operational improvement over an extended period, and substantial opportunity for further acquisition-led growth on a global basis. Our proven track record of working with leading global brands makes The DMC Group a perfect fit with our investment strategy, and we look forward to working with the team to help capitalise on the business’s tremendous potential.”
Justin Wraight, CEO of The DMC Group, commented: “BlueGem have been highly supportive partners in the formation and development of The DMC Group. From these strong foundations we look forward to the next phase of growth with Lion Capital, who share our excitement for the future and have the experience to help us continue to grow and optimise our portfolio of iconic needlecraft and technical yarn brands.”
Lion Capital was advised by Proskauer, PwC and Pragma Consulting. BlueGem was advised by Baird, PwC, Baker & McKenzie and LEK.
ABOUT THE DMC GROUP
DMC is the world’s most iconic embroidery brand, with a heritage stretching back more than 250 years to its founding in Mulhouse, France in 1746. To this day, the brand still produces its embroidery threads on the same centuries-old site it always has done. DMC’s flagship Mouliné stranded cotton thread remains the world’s favourite embroidery thread, selling over one million skeins every single day, and its 500 colours constitute a reference for fashion houses.
Wool and The Gang (“WATG”) is a fast-growing, digitally native brand of knitting kits and premium yarns. This “DIY fashion brand” designs clothing, accessories and homewares which customers knit themselves using materials provided in an all-in-one kit. WATG is a fashion-led business with strong ties to the fashion community since it was founded by Central Saint Martins graduates Aurelie Popper and Jade Harwood in 2008. The brand has been featured several times on the catwalks of London Fashion Week and frequently collaborates with fashion designers on new designs.
Sirdar is a heritage British brand of hand-knitting yarns established in 1880, with a market-leading position in the UK and a growing presence in the USA.
Tilsatec is a leading British brand of high-performance cut-resistant yarn and finished protective glovewear. The brand is recognised as a premium supplier offering the highest levels of cut-resistance without sacrificing comfort for the end user. Until 2017 Tilsatec operated as part of Sirdar, however operations for the two brands have since been separated and Tilsatec today is a standalone business within The DMC Group portfolio.
ABOUT BLUEGEM CAPITAL PARTNERS
BlueGem is a London based, pan-European, mid-market private equity Fund specialised in consumer brands. Established in 2007, BlueGem has over 550 million euros of assets under management across two funds. Its portfolio companies include global, well-known brands such as Liberty London, Dr. Vranjes, Jack Wills, Mamas & Papas and QMS and fast growing, exciting brands such as Iconic London, Lateral and Big Fernand. BlueGem is planning to raise its third fund in the second half of 2019, to continue the successful strategy deployed with the previous funds.
ABOUT LION CAPITAL
Lion Capital is a consumer-focused investor passionate about driving growth through strong brands. With offices in Los Angeles and London, the firm’s principals have led the investment of €6 billion in over 40 businesses and more than 100 consumer brands across North America and Europe. Lion’s focus on market-leading consumer-facing companies has led to investments in such well-known brands as Jimmy Choo, Weetabix and AllSaints.