Isis picks up playground developer

UK lower mid-market buyout firm Isis Equity Partners has bought Playforce, as the smaller buyout market keeps on swinging despite the credit crunch.

ISIS Equity Partners has bought UK school playground developer Playforce for £7 million ($13.7 million; €9.4 million).

Playforce:
UK roll out

Playforce was founded in 1998 with a £5,000 loan from Charles, the Prince of Wales’ charity fund the Prince’s Trust. It has profits of slightly more than £1 million, Paul Morris, who led the deal for Isis, said.

Morris said the lower mid market had been relatively isolated from the problems in the credit markets. “We did not have to go out to banks for aggressive leverage and we’ve had a fillip in deals by virtue of the change to capital gains tax.”

The UK government’s plan to raise the rate of capital gains tax entrepreneurs pay from 10 percent to 18 percent has led to some exiting investments to enjoy the more generous tax advantages before the pending change in the next UK budget.

Morris said Isis had been tracking Playforce for two years and had been looking to do a deal in 2008 independently of the tax changes.

Societal issues such as bullying, obesity and health and safety have caused a government drive for the construction and revamping of playgrounds at schools, Morris said. He said Isis would roll out the playground group across the UK.

ISIS has invested £4.2 million of equity from its Baronsmead VCTs, Isis’ evergreen funds open to retail investors. Debt facilities were provided by HSBC.