Elverys for receivership before management buyout

Mayo-based Elverys Sports is set to be placed into receivership before being acquired by the company's management team with the backing of investors brought to the deal by Dublin-based corporate finance house Capnua.This will secure the 650 jobs at the 55 Elverys outlets across the country but will result in the current owners, Mayo brothers John and James Staunton, no longer being involved in the business.

It is understood that all gift vouchers will be honoured and that the sports chain will also meet its obligations to suppliers in full.

David Carson of Deloitte is expected to be appointed as receiver and is set to sell the retail business to a management buyout team led by Elverys chief executive Patrick Rowland. This is expected to happen over the weekend.

Investors
The MBO is backed by investors brought together by Capnua, which was founded four years ago by former BDO managing partner Paul Keenan, and Eamonn Hayes. The Capnua investors are expected to have a minority holding in the business.

It is not clear how much the MBO team will pay for Elverys.

The receivership was prompted by the National Asset Management Agency, whose debtors included the Staunton brothers.

The proceeds of the sale are expected to be offset against the Staunton’s outstanding borrowings with Nama based on cross-guarantees given by the Mayo brothers relating to various property and trading assets. The Stauntons own some of the properties that are used by Elverys as retail outlets.

Elverys was established in 1847 and is the oldest sports store in Ireland. It was acquired by Staunton Sports in 1998 with the businesses merged under the Elverys brand.

Turnover
The company is unlimited and so does not reveal its financials but it is understood that the chain of sports stores is achieving annual turnover of more than €65 million a year. Company filings show that it has loans with AIB.

The new owners are expected to seek rent reductions from some of its landlords to help the business move into the black.

Elverys' future has been the subject of speculation for some time. A sale process was run recently by IBI Corporate Finance to seek bidders for Elverys. It is understood that a number of rival sports retailers expressed an interest in buying the company, including UK businessman Mike Ashley, who controls the Sports Direct chain in Britain and owns Newcastle football club.