Bridgepoint Capital has taken an 18% stake in Western Wines following a decision by its chairman Roger Gabb to realise an element of his value in the business.

Bridgepoint has invested an undisclosed sum in an equity release/buyout transaction totalling £53m which sees current management also acquire a share in the company.

Founded in 1980 by Roger Gabb, Western Wines has evolved from being largely an importer and supplier of private label wine for the UK multiple grocery market to become the UK’s largest branded supplier of South African wine with over 40% market share and a leading supplier to all major retailers. In 2002 it is expected to achieve sales of over £70m.

Bridgepoint first invested in Western Wines in 1997 when it acquired a minority stake in a deal totalling £4m that was subsequently sold to management in 1999. As a result, the business is well known to Bridgepoint, one of the key reasons for the decision to invest again in the company, Western Wines said.

“Western Wines is a well managed business that recognises the value in bringing on board an institutional shareholder to shape its strategic development,” says Adrian Willetts, a director of Bridgepoint Capital in Birmingham.

“The UK wine sector has grown consistently for two decades and Western Wines has increased its focus on New World wines, one of the most attractive segments. Western Wines has Kumala, the fastest growing wine brand in the UK’s top 10 and the only one owned by a private company. They also represent Cono Sur, one of the market leaders in the Chile sector,” he added.

According to Roger Gabb, introducing Bridgepoint as a shareholder will allow the company to achieve a number of things. “In addition to having valuable input into our business going forward, this investment will allow the management team, led by managing director Mike Paul, to become shareholders and to accelerate the growth of both our brands and those of our key suppliers in South Africa, Italy, Chile, Spain and France,” he said.

Advisers involved in the transaction included: Deloitte & Touche and Wragg & Co for Bridgepoint; PricewaterhouseCoopers, Hammond Suddards Edge and Barclays Acquisition Finance for Western Wines.

Bridgepoint has also invested in the wine sector in Spain through its backing of the €102m buyout in 1999 of Arco Bodegas.