Virgin Wines team complete MBO

Virgin Wines, the major UK wine retailer, has today announced that Mobeus Equity Partners and Connection Capital have provided a combined debt and equity package to support the £15.9 million management buy-out of the business from Direct Wines Limited. The management team will be led by CEO Jay Wright, CFO Graeme Weir and marketing director Paul Adams.

Virgin Wines was founded in 2000 and acquired by Direct Wines in 2005. Jay Wright had previously built a successful mail order wine business, Warehouse Wines, which was acquired by Direct Wines in 2002. Jay, Graeme and Paul took over Virgin Wines in 2008 and merged it with Warehouse Wines in 2009. The management team has successfully grown the combined business to a turnover in excess of £35m.

The company sells over 600,000 cases of its niche range of exclusive boutique-quality wines to 150,000 customers around the UK. In keeping with its philosophy – ‘Life’s too Short for Boring Wine,’ over 90% of its wines are exclusive to Virgin Wines, sourced directly from producers and therefore unavailable from other providers.

Innovative customer loyalty schemes include a WineBank and specialist wine plans - Discovery Club and JustREDS. More recently, the business launched Virgin Wines Fabulous, its new at-home wine tasting evenings for up to 15 guests. 

Jay Wright, CEO, Virgin Wines said: “This is great news for Virgin Wines. We now have the opportunity to grow the business independently, backed by two hugely supportive investors in Mobeus and Connection Capital. It is a dream come true to have completed the management buy-out of a business that I have such a passion for and I look forward to working with our new partners to deliver continued growth and genuine innovation.“

Julian Carr, partner at Connection Capital commented: “Virgin Wines is innovative in its approach to market which is testimony to a cracking management team who have turned the business around over the last five years and we look forward to working with Jay and the team to help the business achieve its growth plans.”

Jonathan Gregory, partner and chief investment officer of Mobeus added: “We believe that the online wine market will continue to grow strongly and Virgin Wines will continue to mature as an independent business.”

Simon McMurtrie, group chief executive of Direct Wines, said: “The Board of the Direct Wines group and our shareholders, the Laithwaite family, want us to accelerate our growth in the US, Australia and in our core Laithwaite’s Wine business in the UK and that is where we are now focusing our investment. Since Jay took charge of Virgin Wines in 2008, he and his team have done a tremendous job of growing the business in the UK and we wish them well as they embark on the next chapter of their Virgin journey. We continue to own Virgin Wines in the US and Australia where they play a key role in the development of our businesses in those two markets.”

Jay Wright, MD, Virgin Wines added: “The Laithwaite family and the Direct Wines management have consistently provided great support to my team and we are grateful to be given this new opportunity of developing the business further independently. The business will continue to be managed from Norwich and Preston, where I am lucky to have strong and dedicated teams."

In the year to June 2013, Virgin Wines had sales of £35m.

Pictured above: back row – left to right: Greg Blin, Mobeus Equity Partners;  Simon Davies, Spectrum Corporate Finance; Jay Wright, CEO Virgin Wines; Paul Adams, marketing director Virgin Wines; Miles Otway, Connection Capital;  Michael Holgate - Spectrum Corporate Finance. Front row – left to right: Graeme Weir, CFO Virgin Wines; Bob Henry Mobeus Private Equity;  Julian Carr, Connection Capital

12 November 2013 - Felicity Murray The Drinks Report, editor