KCP sells remaining shares in York's Gear4Music for £9m

Private equity house Key Capital Partners (KCP) has sold its remaining shares in Gear4Music for £9m.

Backin 2012, KCP took a 30% stake in the £55m turnover online musical instrument retailer, which has a showroom and distribution centre based in York.

Following the sale of KCP’s remaining stake, and earlier partial exits, KCP has achieved a five times money multiple.

Established in 2003, Gear4Music is an online seller of musical instruments including guitars, drum kits, digital pianos, saxophones and cellos, plus recording and studio equipment.

KCP’s £3.4m investment, made in March 2012, enabled Gear4Music to expand its international e-commerce platform which has been central to its success and significant growth.

Gear4Music, which had sales of only £10m at the time, went on to complete a IPOin June 2015, valuing the company at £28m and raising £10.3m of cash.

During KCP’s final sale of shares, the company was valued at £73m. Gear4Music has recently reported that overall revenues have increased by 73% with European sales from March to September 2016 increasing by 160%.

Peter Armitage, partner at KCP, and a non-executive director of Gear4Music has now stepped down from the Board.

He said: “Playing a key role in the phenomenal growth of this retail success story has been a very exciting experience. It has been a privilege to work with such a talented team and help guide them through the IPO process.”

Andrew Wass, founder and chief executive of Gear4Music, added: “KCP’s decision to invest in the business in 2012 has been integral to our subsequent development and setting us on the path to growth.

“With Peter stepping away from the Board, now would seem the appropriate juncture to recognise the very significant contribution they have made over a number of years. I would like to wish both Peter and KCP all the very best in their future endeavours.”

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