Private equity outfit YFM is close to completing the buyout of north west retail chain Dawsons Music, with plans to roll out stores across the country.
The MEN understands Dawsons is likely to change hands before the end of the year in a deal which values the retailer at £5m. YFM is in exclusive talks to acquire Dawsons after beating off rival venture capital firms and other individual bidders.
Dawsons, which has its headquarters in Warrington and operates nine shops nationwide, was founded in 1899 and is owned by managing director David Briggs. Mr Briggs was appointed Lord Lieutenant for Cheshire by the Queen in March and is understood to be looking to sell Dawsons so he can focus on his new role.
As Lord Lieutenant, he is the Queen’s representative in the country and his duties include arranging royal visits and assessing nominations for honours. Dawsons, which sells sheet music, instruments and accessories, employs around 90 staff across its head office and branches in Manchester, Warrington, Stockport, Chester, Altrincham, Liverpool, Bangor, Basingstoke and Reading.
According to accounts for the 12 months to May 31, 2009, Dawsons turned over £14m and made pre-tax profits of just over £400,000. YFM will take a majority stake in the business but Mr Briggs will retain a small shareholding along with senior management, and may continue to act as a consultant to the firm. It is expected that YFM will appoint a new chairman to oversee its expansion of the chain.
One source told the MEN: “There’s been a good deal of interest in Dawsons as it is profitable and has great potential for expansion beyond its northern base as well as online.
“Currently it is probably one of the largest, if not the largest, independent music retailer in a pretty unconsolidated market. There is no nationally recognised chain in this sector and YFM believes Dawsons has an opportunity to fill that gap.”
Dow Schofield Watts, a corporate finance outfit based at Daresbury, near Warrington, is advising on the sale process but no-one was available for comment at the firm.