Souter Investments, the private equity focussed family investment office, has continued its deal making during 2021 with the announcement of the sale of Pet Network International plus the completion of three new investments.
The new investments span a variety of sectors and geographies ranging from sustainably sourced fashion to climate finance and carbon neutral solutions for the voluntary carbon market, and from global fuel and oil testing to UK domestic landline, broadband, TV, and mobile services.
Sale of high growth Pet Network International
The exit of Souter’s investment in Pet Network International follows the successful sale of the business by The Rohatyn Group (“TRG”) to A&M Capital Europe.
Seeking to benefit from the strong global trends around pet humanisation and growing levels of pet ownership across southeast Europe, Souter backed TRG to create Pet Network in 2018 through the acquisition and merger of three distinct pet supplies businesses – Pet Centar, Animax and Mr. Pet.
Pet Network’s management team, led by CEO Ljiljana Markov Medugorac, delivered remarkable growth, transforming Pet Network into the leading pet care platform in southeast Europe, operating across Croatia, Romania, Slovenia, Serbia, and Bulgaria. Supported by Colin Clark, Stepan Karpukhin and Harold Chatelus from TRG, growth was achieved through a combination of initiatives, including add-on acquisitions, multiple new store openings, online and omni channel expansion, and an enhanced own brands portfolio.
The transaction is expected to close in the third quarter of 2021. Terms have not been disclosed.
Ethically and sustainably sourced fashion with Celtic & Co
Celtic & Co is an award-winning wool based sustainable clothing and homeware brand specialising in ethically sourced fashion.
Founded over 30 years ago in Cornwall, Celtic & Co’s heritage and expertise is in crafting sheepskin to produce slippers, boots, and accessories. It has since expanded its offering to include a range of enduring contemporary pieces using the finest natural fibres.
Souter Investments has partnered with successful retail executive and investor Ben Barnett to complete a buyout of Celtic & Co, aiming to capitalise on the company’s well established, successful and scalable e-commerce platform and growing international customer base whilst also accelerating investment into product volumes, new product development, and third-party retailer relationships. Celtic & Co’s founders Nick and Kath Whitworth will continue to be involved with the business. James Williams has joined the business as CEO.
Merger of Climate Care and Natural Capital Partners
The acquisition merger of US voluntary carbon market specialist Natural Capital Partners with existing Souter portfolio company Climate Care has created a world leading voluntary carbon market business offering solutions for companies and organisations looking to meet ambitious climate goals. The transaction was led by Stephen Green, Richard Tudor, and Pierre-Edouard Harant at Averna Capital, the European mid-market private equity house.
ClimateCare provides businesses and governments with carbon offset services, sustainable development programmes, environmental and social impact measurement, and project development. Natural Capital Partners delivers solutions through a global network of projects which make real change possible, reducing carbon emissions, generating renewable energy, building resilience in supply chains, conserving and restoring forests and biodiversity, and improving health and livelihoods.
Together Climate Care and Natural Capital Partners serve more than 500 clients across six continents and have access to upwards of 600 projects reducing and removing carbon emissions across 56 countries. The combined group has been responsible for the reduction of more than 100 million tonnes of CO2e.
Acquisition of VPS
Souter has backed Fremman Capital, the pan-European mid-market private equity house, in its acquisition of a majority stake in VPS, the world’s leading marine fuel testing and advisory services company, which assists the global shipping fleet verify fuel and oil quality to meet environmental regulations.
The global marine fuel supply chain is complex, and international regulations are becoming more restrictive on emissions and fuels. Shipping companies are therefore increasingly focused on ensuring that the fuel they are using is within specifications and fit for purpose.
VPS delivers testing, inspection and advisory solutions that help its customers achieve measurable improvements to fuel and lubricant management, operational efficiency, and regulatory compliance. Headquartered in Rotterdam, VPS provides its services globally through five strategically located laboratories, with samples shipped and tested from anywhere in the world.
The company has made two bolt-on acquisitions in the last month. The first, PGI Industries in Southeast Asia, expands VPS’s presence in the power and renewables sector, and the second, Norwegian based Yxney Maritime, significantly bolsters VPS’s data offering – helping shipping companies track their carbon footprint.
TalkTalk: take private of one the UK’s leading landline, broadband, TV, and mobile service providers
TalkTalk is the UK’s leading value-for-money provider of landline, broadband, TV, and mobile services. It serves over four million customers and operates Britain’s largest unbundled broadband network.
Souter Investments formed part of a Penta Capital led syndicate which completed the £1.1bn take private of TalkTalk in March 2021. Under new ownership, the existing TalkTalk management team, led by Sir Charles Dunstone, will continue to strengthen the business, and increase its service levels for all customers. The group’s status as a private company will enable its management and investors to make long-term investment decisions that will bolster TalkTalk’s customer offering and market position over time.
Since formation in 2006, Souter has invested approaching £500m in over 60 unquoted companies, either as the lead investor or as a partner for other financial sponsors. It currently has a portfolio of investments in more than 30 private businesses.