The MBO and disposal of Keith Prowse

To celebrate its 25th anniversary of leading corporate finance deals, HMT is reminiscing on 10 notable transactions from our archives. Having completed over 500 deals, producing a shortlist of 10 has not been easy but the MBO of Keith Prowse and subsequent sale to Compass Group Plc have certainly made the list.

Created over 220 years ago as a theatre ticketing company, Keith Prowse became the first corporate hospitality business in the UK, inventing the concept of client entertaining.

In 1991, Keith Prowse was bought by Wembley Plc, the group who owns and manages Wembley Stadium. Peter Selby, who, by then had been at Keith Prowse for the past 10 years, was appointed to run the business.

In 2002, Wembley Plc undertook a strategic change and announced that Keith Prowse was no longer core to its group. The opportunity of a management buy-out Peter awaited for 10 years finally came. Peter got in touch with his long-time friend Andrew Thomson and appointed HMT to act for him and his fellow director, “AK” Than. HMT assisted Peter and AK in the MBO process, negotiating with the vendors and raising funding to support the transaction. In 2002, Peter and AK acquired Keith Prowse for £6 million and the MBO was backed by NVM Private Equity who invested £2 million in the business.

Peter, AK and the team had been successfully running Keith Prowse for two years when Compass Group Plc approached them with an offer to acquire the company. Following the success of the first deal, Peter was impressed with HMT’s ability to understand the transaction process and negotiate a deal. Therefore, he decided to appoint HMT again on this occasion. HMT produced a detailed information memorandum, managed the disposal process and negotiated with the acquirers for several months. In September 2004, the management team sold Keith Prowse to Compass Group Plc for £20 million enabling NVM and the team to make a significant return on investment.

Peter stayed on as Chairman of Keith Prowse and facilitated the merger of all hospitality divisions owned by Compass Group. Peter left the business in 2010 and is now a non-executive director of Lifestyled, a leading provider of mobile technology platform for venues. He is also on the advisory board of PMY Group UK and Europe, an Australian leader in digital technology for the corporate hospitality sector. Peter and his wife Amanda have also started their own holiday home business in Cornwall called St Mawes Retreats. Keith Prowse is still owned by Compass Group and is the leading corporate entertainment provider in the UK with exclusive contracts at prestigious events such as Wimbledon, Cheltenham and Lords.