The private investment company, Rcapital, has completed a franchisee-led buyout of Cash Generator, the buy and sell store.
The franchisee buyout follows a successful and complex restructuring when the business was owned by its former U.S. parent, CNG Inc.
Rcapital says that it acquired the business in September 2017 after the owners had designated its wider UK operations as non-core.
Rcapital and the Cash Generator management team explain that it has returned the business to a franchise only model by selling corporate stores to existing franchisees, exiting loss making sites and restructuring the business.
In addition, Cash Generator’s new and simplified operational structure and subsequent sale has resulted in the business going back to its roots to a cash generative and profitable business, well-positioned to enter its next phase of growth.
Graeme McKinnon, managing director at Cash Generator, said: “Having Rcapital on board as an investor and supporter of the Cash Generator brand has allowed the business to lay some very strong foundations to enable future growth.
“The Rcapital team immediately saw the potential in our business and they provided the financial support and technical skill to help the management team create a profit-making core business.
“With the franchisees now investing their own money in the buyout, this is a very exciting time for all of the customers and the local communities they serve.”
‘The natural home’
Phil Emmerson, chief operating officer at Rcapital, commented: “This investment demonstrates our ability to deploy our experience in navigating a complex restructuring to enable a stable, franchise-focused, business to emerge. The natural home was always back with the franchisees, and we are pleased that this deal enables them to focus on taking the business forward.”
Cash Generator currently has 54 franchisees that employ over 500 people, which operate from 110 retail stores across the UK. Rcapital and Cash Generator were advised on the exit by Shakespeare Martineau and Harper Macleod.