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RCapital structure deal

Cash Generator chain sold in franchisee-led buyout

Cash GeneratorPrivate investor Rcapital has completed a franchisee-led buyout of Edinburgh-based Cash Generator following a complex restructure of the business.

It was was acquired by Rcapital in September 2017 after US-based CNG Inc had designated its wider UK operations as non-core.

Rcapital and the Cash Generator management team immediately returned the business to a franchise only model by selling corporate stores to existing franchisees and exiting loss-making sites.

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.

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 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, chief operating officer at Rcapital, commented: “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 more than 500 staff in 110 retail stores across the UK.

Rcapital and Cash Generator were advised on the exit by Shakespeare Martineau and Harper Macleod. Other advisers included FRP Advisory, Gateley, PHD Property Advisory and Squire Patton Boggs.

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