A leading supplier of art materials

ColArt was the world's leading supplier of materials to professional and amateur artists and art students, providing colour, brushes and a range of accessories. Its brands included Winsor & Newton and Lefranc & Bourgeois, and its products were sold in over 120 countries. ColArt had production facilities in the UK, France and China, where it manufactured core products such as oil colours, water colours and brushes. Other products, for example canvas, paper and easels were sourced externally.

ColArt was built up by the Becker Group, a privately owned Swedish company, through the acquisition of a number of long established brands. In 1999 Becker decided to realise cash from its investment in ColArt in order to concentrate on its other subsidiaries. It also wanted to retain a significant stake in ColArt because it saw the growth potential of the business, so it was looking for a supportive partner who would be keen to assist in ColArt's development. Montagu was an attractive choice due to our successful track record of private company recapitalisations and our commitment to support follow-on investments by portfolio companies.

In August 1999, Montagu led, structured and arranged a £101 million institutional refinancing of the business. The transaction involved the recapitalisation of ColArt, with Montagu taking a substantial minority stake.

Montagu was attracted to ColArt by its dominant market position and the stable nature of the business. The craft and education markets provide good growth opportunities, and with the support of Montagu, ColArt was ideally placed to take advantage of the consolidation and globalisation taking place in the industry. Montagu provided further funds in due course to finance the acquisition of Liquitex, a US-based competitor, which took place in May 2000.

In 2002, Becker Group decided to take full control of ColArt again. Montagu sold its stake to Becker based on a formula put in place at the time of the original deal, achieving an attractive return of 2.8 times its original investment.

This transaction illustrates how a vendor group can participate in the ongoing success of a business by using private equity to raise funds to finance future growth and acquisition plans.

Deal details

Deal type: Recapitalisation and Growth Capital Financing Investment Year: 1999 Country: United Kingdom Status: Realised Value: £101 million Industry Sector: Consumer