Hornby makes first acquisition since major investment by Mike Ashley’s Frasers Group
Hornby has made its first acquisition since Mike Ashley’s Frasers Group invested in the company last month.
The Kent-based business has snapped up the assets, trade and intellectual property of The Corgi Model Club (CMC) from Blue 14, an investment vehicle majority-owned by entrepreneur Jim Lewcock.
The management of CMC, which was was established in 2021 as a third party partnership with Hornby, will join the business.
The deal is being financed through the purchase of £400,000 of existing stock from CMC, which will be sold directly to Hornby customers in the future, and an additional consideration of c. £200,000.
Hornby said it is adding c.£2m of revenue at a 15 per cent operating margin and more than 6,000 active subscribers.
Hornby CEO Olly Raeburn said: “Bringing the Corgi Model Club subscription proposition into the Hornby business makes complete sense and we anticipate driving further growth both domestically and internationally over the coming months and years.
“Furthermore, the immediate addition of over 6,000 die-hard Corgi collectors represents a great opportunity for creating additional value in the Corgi mother brand.
“This is an exciting development both for Corgi and for the Hornby business overall.”
Guy Stainthorpe, MD of CMC, added: “Galvanising our long term partnership with Hornby in this way is a hugely positive development for CMC and provides us with a fantastic opportunity to further develop a successful and growing business.
We look forward to joining Hornby and working alongside Olly and the team.”
The acquisition comes after Mike Ashley’s retail empire Frasers Group significantly increased its stake in Hornby last month.
The owner of Sports Direct and House of Fraser acquired more than 11 million shares in the company, taking its total holdings to more than 15 million, or 8.9 per cent.
More than 70 per cent of Hornby’s shares are held by Phoenix Asset Management Partners, with Artemis Investment Management the next largest shareholder on 16.2 per cent.
Since the investment, Hornby’s market capitalisation increased from just over £35m and currently stands at almost £57m.
The company posted a revenue of £23.8m for the six months to the end of September 2023 and a pre-tax loss of £5m.