Public to private deal of the international consumer rentals business


Thorn was a publicly-listed consumer electrical appliance rental business which included Crazy George’s (a consumer goods retailer and financier now rebranded Brighthouse) and Quadriga (a technology provider to the hotel sector).

Investment strategy 

Asset-Backed: The Thorn group owned retail stores, consumer leasing assets, hotel media assets and associated contracts.

Requiring Fundamental Change: The Thorn business was lacking clear strategic direction and was inefficiently structured with much redundant hierarchy. Opportunities were identified to create standalone businesses to improve management focus and ultimately improve the marketability of each business line.

Creating value 

  1. Transforming strategy

    • Detailed customer and product profitability analysis transformed sales and pricing strategies in the UK and Scandinavian rental businesses. The businesses were refocused on value rather than earnings growth, resulting in the reduction of expenditure on new rental stock and closure of uneconomic shops, greatly enhancing cash flow generation.
    • Brighthouse and Quadriga were established as standalone companies with the business and operating models overhauled to reduce costs, create growth opportunities and increase value.
    • Quadriga moved away from a reliance on third party technology to the development of its own digital platform.
  2. Strengthening management

    • Shortly after acquiring Thorn, the individual businesses were established as standalone companies to improve management focus and eliminate redundant corporate infrastructure.
    • A new CEO was appointed at Quadriga to drive sales and reduce costs.
  3. Developing through capital expenditure

    • Brighthouse invested in an analysis of its store portfolio and, based on its findings, embarked on a targeted programme of new store openings.
    • Quadriga launched ‘Genesis’, a new digital entertainment and infrastructure platform. The platform was well received by customers and was installed in approximately 4,500 rooms across Europe. A lower cost version, ‘Genesis Co-Ax’, was later launched in an attempt to address the higher volume mid-market and defend contracts due for renewal.
  4. Building through mergers and acquisitions

    • Thorn UK was combined with Granada Rentals to create Boxclever, a TV rental company.
  5. Lowering the cost of capital to create extra upside

    • It was identified that, if run for cash rather than low return earnings growth, the Thorn UK and Nordic rental businesses could be securitised to provide capital for operational change and allow any upside from strategic redefinition and operational turnaround to be retained at low cost.

Status of Investment: The Thorn investment has been fully realised.  The group was refocused around its high value businesses, with strategic disposals of those businesses and regional operations which did not fit this profile. The business was fully exited in 2007.

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Size of transaction