Published: January 30, 2020 | Updated: January 30, 2020
Green light for expansion as vending machine company secures funding for future growth
A Christchurch company is set for major expansion after raising funds from a Belfast-based private equity house.
The investment in Decorum Vending Ltd from Cordovan Capital Partners will be used to grow the business which provides vending machines to the rail network.
No figure has been declared for the investment but it has been described as ‘significant.’
The company, founded in 2015 by Declan Sewell, provides vending machines utilising the latest in cashless technology and environmentally friendly refrigeration and lighting units, tailored to the specific requirements of the rail industry.
In addition to traditional snack and drink products, Decorum has partnered with Britvic and Pepsico to provide a healthier alternative with the ‘HelloGoodChoice’ initiative.
It is also exploring a partnership with a global coffee brand to provide a non-traditional coffee solution to the rail industry.
After proving itself on four mainline franchises across the country, Decorum successfully tendered for the exclusive vending contract for all Network Rail managed stations in 2019.
As a result it gained access to the highest-footfall sites in the UK.
In addition, it is exploring the use of AI and promotional media screens to increase its offering and overall customer experience.
The innovations, as well as upcoming growth opportunities, require significant investment, leading the company to seek a funding partner.
Declan, who is Decorum’s Managing Director, said: “This fundraising will provide a launchpad for the next stage of Decorum’s growth.
“With our premium service offering now well-known in the UK rail sector and the Network Rail contract secured, our aim is to dominate the sector within the next five or so years and ultimately diversify into other markets.”
Mike Irvine and Daniel Anderson led the investment team from Cordovan Capital Partners, which focuses on growth capital and MBO/MBI transactions.
It typically invests up to £2m in post-revenue, EBITDA positive businesses and provides not only capital but also significant commercial and investment expertise to investee companies.
Mike said: “Declan and the wider Decorum team have demonstrated that there is a compelling opportunity in the vending and unattended retail sector for those prepared to embrace innovation and provide excellent customer service.
“With this funding package, we are delighted to support the next phase of Decorum’s growth and look forward to working with the team as they continue to develop the company.”
Paul Stout and Chris Potts from PKF Francis Clark’s corporate finance team advised Decorum on the development of its financial model and business plan, as well as the fundraise itself.
Matthew Fretten of Frettens Solicitors provided legal support.
Paul said: “Declan has shown great business acumen in identifying the opportunity to disrupt an underserved sector.
“Decorum’s modern offering and customer-centric approach has appealed to the rail franchises and led to the company establishing a strong foothold and reputation.
“This equity injection will help propel the company to the next stage in its ambitions, and PKF Francis Clark look forward to supporting Declan and his team in the next phase of Decorum’s journey.”
Matthew added: “It has been a pleasure to work with Declan and the team at Decorum to help them realise their ambitions.
“They have identified a fantastic opportunity in the market and have developed a great business plan to take advantage of it.
“Raising capital for investment in a business requires careful consideration, regardless of how strong your plans are. Thankfully, all parties involved worked well together to ensure the right deal was reached in a suitable timeframe.
“This is an extremely exciting time for Decorum and we look forward to working with them closely as they grow the business.”
Paul O’Brien and John McGuckian of Tughans Solicitors acted for Cordovan.