Virgin Wines bosses seal buyout

The bosses of Virgin Wines UK – the online merchant which specialises in boutique, handcrafted wines from all over the world – have secured a £14m management buyout from Direct Wines with backing from two venture capitalists.
The firm, one of the pioneers of direct-sell wine clubs, began trading in 1969 as Bordeaux Direct. It became Virgin Wines in 2000 when the Richard Branson empire bought into the business, and despite being taken over by Direct Wines five years later, has retained the Virgin brand and positioning.
The company handles distribution for Laithwaite’s, The Sunday Times Wine Club, Averys, British Airways Wine Club, Nectar Wine Club and the Telegraph Wine Club, and also runs two loyalty clubs of its own, The Discovery Club and Just Reds.
The MBO team, led by managing director Jay Wright, financial director Graeme Weir and marketing director Paul Adams, secured funding from Mobeus Equity Partners and Connection Capital. In the year to June 2013, Virgin Wines had sales of £35m.
Wright, who has headed up the business since 2008, said: “The Laithwaite family and the Direct Wines management have consistently provided great support to my team and we are grateful to be given this new opportunity of developing the business further independently. The business will continue to be managed from Norwich and Preston, where I am lucky to have strong and dedicated teams. “
Direct Wines group chief excutive Simon McMurtrie added: “The board of the Direct Wines group and our shareholders, the Laithwaite family, want us to accelerate our growth in the US, Australia and in our core Laithwaite’s Wine business in the UK and that is where we are now focusing our investment.
“Since Jay took charge, he and his team have done a tremendous job of growing the business in the UK and we wish them well as they embark on the next chapter of their Virgin journey. We continue to own Virgin Wines in the US and Australia where they play a key role in the development of our businesses in those two markets.”
During the negotiations, Direct Wines were represented by Argyll Partners and Olswang. The management team, Mobeus Equity Partners and Connection Capital were represented by Spectrum Corporate Finance and Shoosmiths.