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Funds from the Baronsmead VCTs, managed by ISIS Equity Partners, have backed the MBO of children’s play area provider Playforce. The deal puts a value of £7 million on the business, which was established ten years ago with a loan of £5,000 from charity The Prince’s Trust.

ISIS invested £4.2 million in the deal, with debt provided by HSBC. The firm has not disclosed whether it has taken a majority stake, but says its shareholding is “substantial” following the transaction.

Edward Webb, who founded the business at the age of 24 with his wife Rachael, will continue as managing director and retains a significant shareholding. ISIS has appointed Geoff White as chairman, who previously chaired playground company SMP Group following its management buy-out in 2002.

Richard Bucknell from the new investments team at ISIS says that the firm will provide further investment if necessary to achieve growth.

Wiltshire-based Playforce offers a range of play equipment from ‘wobble walkways’ and climbing walls to outdoor classrooms. The company, which reported turnover of £5.2 million in 2006, says the outdoor play sector has become increasingly prominent as the Government has focused its attention on the problem of child obesity.

Consultancy firm CCL Management Services provided operational due diligence advice, led by operations director Ian Ainsworth, CCL. The consultancy was introduced to the deal as a result of a long-standing relationship with ISIS.

Ainsworth commented: “CCL’s involvement was to conduct operational due diligence, focusing upon a detailed review of Playforce’ sales structure, sales management processes, supply chain and information technology management. These areas of expertise are at the core of CCL’s service offering.

“Playforce has a strong market position with significant potential for further growth. It has a strong and committed management team, which combined with the strength of its product range, will no doubt perform well in the future.”

Armstrong Transaction Services conducted commercial due diligence on behalf of ISIS throughout the deal, continuing its ongoing relationship with the firm. The team was led by director Tom Raymond and associate director Ed Hikmet, and worked with specialist government lobbyists to help understand the impact of the Children’s Plan on playground equipment usage and budgets.

Target Corporate Finance acted as lead adviser to the owners of Playforce throughout the deal. The buy-out allowed the firm to realise part of its investment in the company, providing funds for growth.

The team, led by senior corporate finance manager Matt Eves, was introduced to the clients by the Bath office of Target Chartered Accountants who had been working with the client for two years on strategic business planning to help grow the business and develop the management team.

Matt Eves said: “Playforce is an excellent business with innovative, high quality products and lots of potential for growth. The investment by ISIS will allow it to follow up new opportunities and become a major force within the play industry.”

Morgan Cole advised HSBC Bank plc on its debt funding of the acquisition. Morgan Cole's team was led by corporate partner Jonathan Rees and senior solicitor in the banking department Anita John.

Rees said: “Morgan Cole advised on all aspects of the funding and security package and the acquisition. We were also involved in negotiations with ISIS who provided private equity finance.”

ISIS Equity Partners has funds under management of £726 million, which it invests on behalf of both retail and institutional clients. Its typical investment size is between £2 million and £30 million.

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