One of the UK’s biggest home shopping groups has been put up for sale for more than £200m, four years after being taken private for less than half that sum.
A strategic review of the business has been ordered by Inflexion, the private equity firm which acquired it in 2011.
Insiders said on Thursday that an auction was likely to begin shortly, with retailers and media groups, as well as other investment groups, all expected to consider bids.
Ideal Shopping Direct has exploited the rapid growth of the ‘crafting’ market, which caters to predominantly female consumers who have an interest in activities such as cake-decorating, knitting, card-making and embroidery.
The company’s principal TV channel is Ideal World, with other channels including Create and Craft and Ideal Extra.
Sky, the European home entertainment group, is among the broadcasters which carries Ideal Shopping Direct’s channels.
Inflexion, which led the £78.3m buyout of the company following a string of profit warnings, holds a 75% stake while its management team, including chief executive Mike Hancox and Ian Jebson, the finance director, own the remaining shares.
David Hamid, a former Dixons and Halfords executive, is Ideal Shopping Direct’s chairman.
The company, which has 3.8 million customers, recorded pre-tax profits of approximately £15m in 2014 and is expected to see this figure grow to around £21m this year.
Inflexion hopes that Ideal Shopping Direct’s international expansion – in December, it launched a partnership with Jo-Ann Fabric, a crafting retailer to establish a US version of TV channel Craft & Create – will enhance the potential to achieve a bumper price-tag.
The UK crafting market is worth £2.5bn in annual sales, while its US equivalent generates roughly seven times that level of revenue.
Ideal Shopping Direct has also embraced social media platforms, becoming one of the first UK-based companies to broadcast live on Facebook.
Sources close to the company say the rise of platforms such as Instagram and Pinterest have also enhanced opportunities for crafting fans to share their work in public forums.
Inflexion and Ideal Shopping Direct declined to comment.
Sourced: Sky News