Hornby Hobbies to sell Scalextric business for £20m

(Sharecast News) - Hornby Hobbies said on Friday that it has agreed to sell its Scalextric business for £20m. The business is being sold to Scalextric Motorsports, which has been established by Mark Brown, the president and chief executive of Purbeck Capital Partners, to be the holding company in the future.

Hornby said the sale price includes £8.5m in cash upfront and a remaining £11.5m deferred and payable out of free cash flow. Completion of the sale is conditional upon certain consents and is expected to occur in early March.

Hornby Hobbies, formerly known as Hornby and listed on AIM, said the sale was an "important milestone" in Scalextric's growth journey and crystallises value for the company. The proceeds will be used to pay down debt and invest in Hornby's other individual brands.

Hornby said Scalextric's operations will continue to be supported within its existing infrastructure. Hornby will manage the Scalextric business as agent, "ensuring operational continuity while enabling Scalextric Motorsports to focus on accelerating the brand's next phase of growth," it said.

Hornby chief executive Olly Raeburn said: "This is a hugely exciting development for the Scalextric brand, which builds on encouraging progress over the last couple of years. Mark's leadership will bring enormous experience, energy and enthusiasm to the business and we look forward to supporting the execution of his vision and strategy.

"We have enjoyed working with him to get this transaction over the line and are now focused on converting all of the positive discussions into reality and growth for Scalextric."