Connection Capital, the specialist private client alternative investments business, has completed a £6.4m investment in the MBO of one of the UK’s leading TV and film set design and build businesses, Cardiff-based 4Wood TV and Film Ltd.
- Blue-chip customer base includes Netflix, Disney+, Lucasfilm, BBC, Sky, Apple TV, Amazon Prime Video, Universal and HBO
- Transaction supported by senior debt package from Virgin Money (Clydesdale Bank)
4Wood's recent and on-going work includes the high-profile productions of His Dark Materials (BBC/HBO), Sex Education (Netflix), Doctor Who (BBC), A Brave New World (Universal), A Discovery of Witches (Sky) and Willow (Disney – premiering later this year).
4Wood has an 85% share of the high-end TV and film set production market in south Wales (the second largest market in the UK after the south-east) and has strong relationships with the three principal studios there. Capacity in the south Wales studio market is expected to grow significantly in the next two years, as international content providers and production companies continue investing in the region. Several projects have also been delivered or are in the pipeline at Pinewood Studios, Ealing Studios and other productions in the south-east and across the UK.
As TV, streaming and film companies compete to deliver top quality content, demand for professional set design and construction is poised to accelerate rapidly. Overall, in the UK, the market value for film-making and high-end TV was £5.6bn in 2021, up from £3.6bn in 2019 pre pandemic. The High End TV and Film market in the UK is one of the country’s most successful industries, supported by the government. The recent BFI “Screen Business” report demonstrates that every £1 of UK film tax relief generates £8.30 for the U.K. economy via direct spend on screen production, local business and infrastructure growth, job opportunities, inward investment e.g. in studio space, exports of UK services and productions, travel, retail and tourism (Bath, for example, now offers a number of “Bridgerton” tours).
Established in 2008, 4Wood was part of the rapid growth in importance of drama productions in Wales, working with the BBC on Dr Who, Torchwood and Sherlock in the region. 4Wood is one of only a handful of companies in the UK with the scale, experience and expertise to deliver each aspect of set design, build and project management, from initial consultation through to disassembly and disposal on marquee high end TV and film productions.
As part of the transaction, an experienced Executive Chairman, Chris Higgs and Non-Executive Director, Travis Baxter, with backgrounds in the TV and film production and media sectors will join the board to help drive the growth of the business.
Miles Otway, Partner at Connection Capital comments, “4Wood has carved out a prominent position in the market, helping to establish Wales as a go-to location for TV and film production, raising the bar in its industry and developing excellent relationships with some of the biggest names in the business.”
“4Wood is a well-run business with a first-rate reputation, excellent team and an impressive catalogue of productions, operating in a swiftly expanding market. It is now well-placed to capitalise on rapid growth opportunities, both in Wales and more widely across the UK, making it a highly appealing private equity investment proposition.”
“The management team has a deep understanding of the industry and has demonstrated a track record of delivering sets of the highest quality, at a competitive price, operating to short timetables and delivering for their clients. As the scale and complexity of sets required increases as competition for top quality content intensifies, 4Wood’s professionalism is likely to be in high demand.”
Andrew Forse of 4Wood management commented:
“This is a really exciting time for the management team and a fantastic opportunity to grow our business with our new backers. Connection Capital was clearly the right partner for us in our MBO from the first meeting and the unique reach of their network has allowed us to source excellent support for the company in our incoming NEDs. We are really looking forward to working together to turbocharge the growth of 4Wood and continue revolutionising the approach to our piece of the production market in the UK”.
Scott Fisher, founder of 4Wood, commented:
“We are incredibly proud, and it has been hugely rewarding to have built 4wood from a small family business to the multifaceted creative business it is today. The investment from Connection Capital along with their shared passion and vision to progress 4wood, and the talented creatives we are so proud to work with, will undoubtably take 4wood to the next level. We are excited to see what the future holds.”
About Connection Capital
Connection Capital LLP is a Financial Conduct Authority authorised and regulated, specialist syndicator of investment funds from private professional investors into direct private equity, private debt and commercial property deals, as well as alternative asset funds. It currently has some £400 million of funds under management across a diverse portfolio. Connection Capital provides a specialist managed service to help professional clients build up their own alternative asset portfolios. Private investors self-select which opportunities they want to take a stake in. Opportunities are identified and negotiated by Connection Capital, which also carries out all due diligence and manages the investment from completion through to exit, on its clients’ behalf.
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Advisors – Buy Side
Gateley Legal – Legal advice to Newco and Connection Capital and Legal Due Diligence
PKF Francis Clark – Financial and Tax Due Diligence and Tax Structuring
RPL – Commercial Due Diligence
Confidas People – Management Due Diligence
Vista Insurance Brokers – Insurance DD
Directorbank – Exec Search
Advisors – Sell Side
Lexington Corporate Finance – Lead Corporate Finance Advisory to 4Wood Vendors and Management
Hugh James – Legal advice to 4Wood Vendors
Capital Law – Legal advice to Management