Investment Completion - Kit for Kids
31 July 2017
Award-winning children’s product manufacturer ready to grow fast with £3.7million of capital raised from Connection Capital clients.
An innovative, award-winning children’s product manufacturer is ready to capitalise on its significant growth potential after private investors of Connection Capital LLP (‘Connection Capital’), the specialist private client investment business, committed £3.7million of development capital.
The company, Kit for Kids, manufactures high quality, health and safety-focussed children’s mattresses with factors like breathability, temperature regulation, hygiene and support being front of mind.
Its anti-allergy cot mattress was the first to be awarded the ‘Allergy UK Seal of Approval’ and its products have won a host of awards including a place in the ‘Innovation of the Year’ category at the 2016 Prima Baby Awards and more recently, in conjunction with John Lewis, a ‘Which? Best Buy’ in May 2017.
In the UK, its white label and own-brand mattresses are sold through major retailers such as John Lewis, Mothercare and Babies’R’Us, and the company is also expanding rapidly via leading high-end retailers in the Middle East.
Through Babies’R’Us, Kit for Kids has been supporting Great Ormond Street Hospital Children’s Charity since 2008. To date, they have raised £380,000 for the charity which has helped towards the construction of two wards.
The investment in Kit for Kids will enable the company to meet increasing demand from existing retail customers for its market-leading mattress products and also exploit further significant growth opportunities both in the UK and in export markets.
The company has featured in the Sunday Times SME Export 100, the annual listing of the fast-growing export companies in the UK, two years running.
Kid for Kids also has a highly successful educational products arm, providing softplay equipment, furniture and flooring to nurseries and schools via trade catalogues sales. This provides diversification, as the two divisions have different customer bases and market dynamics.
Founded in 1993 by CEO Jan van der Velde as a supplier of soft play and educational products when he could not find the sort of products he wanted to purchase for his children, its first mattress was made in 1997. Based in Sevenoaks, Kent, it also has operations in Norfolk, Europe, Dubai and the US. It trades in over 30 countries (source: Kit for Kids).
Luke Matthews, Investment Director at Connection Capital, who led the investment says, “Kit for Kids has a clear best-in-class product proposition, which is in high demand from leading retailers in the UK and beyond, so this investment will give it the financial firepower it needs to fuel further growth.”
“Having spent years focussing on giving parents the safest, healthiest options for their children, based on the latest medical research, as well as developing strong retail relationships, the company has carved out a new and expanding market niche in a key product category.”
“With ever more being understood about allergies, and the impact of mattress design and materials on infant health and sleep safety issues, consumers are increasingly considering health implications as well as comfort and price in their decision-making.”
“Our private investor clients saw this as an attractive opportunity to back an experienced and respected management team to exploit significant opportunities to drive sales and unlock its potential. The fact that its product portfolio is also diversified with its highly profitable educational division was also very appealing.”
“We believe there is a strong value creation opportunity here, and it’s a deal that offers attractive risk/reward dynamics, so it’s a very exciting prospect to put to our client base.”
Jan van der Velde, CEO of Kit for Kids, says, “This investment enables us to ensure we can keep pace with increasing demand from our customers, roll out growth that’s already underway and exploit the wide range of further expansion opportunities that are out there.”
“We’re delighted that Connection Capital’s clients have seen the value in what we offer and that they are committed to supporting us as we consolidate and expand our presence in the marketplace, both here in the UK and abroad.”
“As we grow, we aim to continue to be at the forefront of innovation in this area, to ensure we always offer the highest quality, most advanced mattress product range on the market.”
Connection Capital's legal advice was provided by Gateley Plc with financial due diligence by Grant Thornton, tax advisory by Claritas and management due diligence by Highwire Consulting. Castle Corporate Finance acted as lead advisors to Kit for Kids with Thomson Snell & Passmore providing legal advice.
If you are interested in receiving more information about future investment opportunities and are not yet a client of Connection Capital, please contact Steve Wilson.