Cash Generator shop store front

Cash Generator

Date Bought: September 2017

Date Sold: March 2019

Industry: Buy / sell retailer

Location: UK

Website: www.cashgenerator.co.uk

Cash Generator logo

“The Rcapital team immediately saw the potential in Cash Generator, they provided the financial support and technical skill to help the management team create a profit-making core business.” Graeme McKinnon

Private investor Rcapital has completed a Franchisee-led Buyout of Cash Generator on 1st March 2019.

Cash Generator is a successful and well established retail business, focused on being the first place customers come to sell and buy second hand items.

The Franchisee Buyout follows a successful and complex restructure of what was a distressed business when it was owned by its former US parent, CNG Inc.  The business was acquired by Rcapital in September 2017 after its owners had designated its wider UK operations as non-core.

Growth story

Rcapital and the Cash Generator management team immediately returned the business to a Franchise only model by selling corporate stores to existing Franchisees, exiting loss making sites and restructuring the business. Cash Generator’s new and simplified operational structure and subsequent sale has resulted in the business going back to its roots and it is now a cash generative and profitable business, well-positioned to enter its next phase of growth.

Outcome

Graeme McKinnon, Managing Director at Cash Generator, said: “Having Rcapital on board as an investor and supporter of the Cash Generator brand has allowed the business to lay some very strong foundations to enable future growth. The Rcapital team immediately saw the potential in our business and they provided the financial support and technical skill to help the management team create a profit-making core business.

With the franchisees now investing their own money in the buyout, this is a very exciting time for all of the customers and the local communities they serve.”

Phil Emmerson, COO at Rcapital commented: “This investment demonstrates our ability to deploy our experience in navigating  complex restructuring to enable a stable, franchise-focused, business to emerge.  The natural home was always back with the franchisees, and we are pleased that this deal enables them to focus on taking the business forward.”

There are currently 54 franchisees who employ over 500 people operating across 110 retail stores on High Streets throughout the UK.

Rcapital and Cash Generator were advised on the exit by Shakespeare Martineau and Harper Macleod. Other advisors instrumental to the successful result include FRP Advisory, Gateley Plc, PHD Property Advisory and Squire Patton Boggs.