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Foresight nets 2x return on Factory Media exit

6 Feb 2012

UK-based alternative asset manager Foresight Group has sold its stake in Factory Media to Forward Internet Group (FIG) for £8m, netting the firm with a return of more than double its initial £3.8m investment in 2006.

Factory is one of Europe’s largest action sports media owners and is currently focused on two market segments, board sports and cycling. The company publishes 19 consumer magazines and 25 targeted sports websites, along with its flagship digital offering MPORA.COM.

Foresight invested in Factory Media in 2006 after backing the MBO/MBI of three action sports publishers. Having integrated and consolidated the businesses, during 2007 Factory began investing heavily on its digital business, notably MPORA and its magazine websites.

The company grew, particularly within digital, and during 2010 and 2011 acquired a number of further media titles in the UK and Europe.

Last year Factory launched MPORA GEAR, a product comparison platform for the worldwide cycling and snowboarding markets. Staff numbers have almost doubled to more than 100 since the 2006 investment and the company now has offices in Germany and France, as well as the UK.

James Livingston, an investment director at Foresight, said, “We’re delighted to have generated another good return for our investors through this exit, particularly given the challenging economic backdrop. It was a pleasure working with such a professional and dynamic management team, who have navigated the changing media landscape so successfully. l have no doubt the company will continue to grow and innovate successfully in partnership with Forward.”

FIG is a privately-owned European business, which operates a portfolio of web brands and digital media assets. Due to further consideration being held in escrow and, subject to various other conditions, a further £1m may also be released to Foresight over the next two years.

Last month Foresight also announced that it had completed the management buy-in of plastics manufacturer and distributor Industrial Engineering Plastics for £4m.

As a venture capital trust (VCT) manager, the firm is among a list of firms bracing themselves for new legislation that could spell the end for management buy-outs through VCTs, a move that could significantly change the competitive landscape for limited partnership funds.

The draft Finance Bill 2012 proposes to ease the rules on how much money individual investors can invest in – and how much firms can invest through – VCTs, which were introduced by the UK government in 1995 as tax incentives to encourage people to invest in venture capital. The ceiling for individual investors will increase from £500,000 to £1m, and the £1m maximum that firms can invest in a single company will be lifted.

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