10 deals of HMT – 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 its 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 and Peter Selby 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 buyout Selby awaited for 10 years finally came. Selby 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 Selby and AK in the MBO process, negotiating with the vendors and raising funding to support the transaction. In 2002, Selby and AK acquired Keith Prowse for £6 million and the MBO was backed by NVM Private Equity which invested £2m in the business.

Selby, AK and the team had been successfully running Keith Prowse for two years when CompassGroup plc approached them with an offer to acquire the company. Following the success of the first deal, Selby was impressed with HMT’s ability to understand the transaction process and negotiate a deal. He appointed HMT and  they 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 for £20m enabling NVM and the team to make a significant return on investment.

Selby stayed on as chairman of Keith Prowse and facilitated the merger of all hospitality divisions owned by Compass Group. Selby left the business in 2010 and is now a non-executive director of Lifestyled, a leading provider of mobile technology platform for venues. 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.hmtllp.com