Hornby sells Scalextric after 60 years

Hornby, the model train maker, has sold off its slot car racing brand Scalextric to a US drinks tycoon for £20m.

The firm’s deal to sell the toy car racing range, founded 70 years ago and bought by Hornby a decade later, to Purbeck Capital Partners also involves the brand’s intellectual property rights.

Purbeck is the family investment office of Mark Brown, the former chief executive of Sazerac, the US drinks giant behind Southern Comfort whiskeyand BuzzBallz, the popular Gen Z cocktail brand.

Scalextric, whose first models were invented by engineer Fred Francis in Hampshire in 1956, is one of Britain’s most recognisable hobby brands. It was acquired in 1968 by Hornby, the Kent-based model railway manufacturer that also owns the Airfix and Corgi model makers.

Hornby, whose customers include Sir Rod Stewart, said it would use the proceeds of the sale to pay down debt and invest in its other brands.

The firm’s parent company, Castelnau, which also owns the funeral chain Dignity, is mounting a turnaround plan at the debt-laden model manufacturer.

Last year, Hornby delisted from London’s junior Aim exchange, saying it wanted to pursue its turnaround efforts away from the public scrutiny and “regulatory hurdles” of the stock market.

It has also hired Mike Ashley, the Sports Direct founder, as an adviser after he took a near-9pc stake in the business through his retail empire Frasers Group.

As part of the deal with Purbeck, Hornby will continue to manage Scalextric as an agent of a new holding company, Scalextric Motorsports. Mr Brown will also take up a role advising Hornby on its wider transformation plan.

The tie-up includes £8.5m in cash up front, with the remaining £11.5m deferred and payable from free cash flow.

Expansion plans

Mr Brown said he would seek to expand Scalextric into new areas of motorsport while offering families an alternative to online entertainment.

He said: “We are both honoured and thrilled to be acquiring such an iconic British motorsport brand, which has been bringing family and friends together for motor racing competition, excitement, and fun at home for nearly 70 years, spanning four generations.

“As we look to a long-term future, with Scalextric as a now family-owned company, we are energised by the opportunity to continue bringing competitive racing fun to families, while expanding into new areas of motorsport and helping to build physical and hand-eye coordination skills, particularly at a time when families are trying to balance time spent online versus real-world activities.”

Olly Raeburn, the chief executive of Hornby Hobbies, 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.”

[Source: Daily Telegraph]