On Monday, The Pebble Group, the Manchester, U.K.-headquartered parent company of Facilisgroup and global promotional products distributor Brand Addition (asi/202515), raised £135 million British pounds – about $174.5 million – in its initial public offering on the AIM market of the London Stock Exchange.

Of the gross amount, £79 million pounds will go to The Pebble Group. Another £56 million is destined for existing shareholders. The Pebble Group plans to use its capital to pay off debt and settle an outstanding consideration stemming from the 2018 acquisition of Facilisgroup, a St. Louis, MO-headquartered software-as-a-service business that provides services that range from CRM and order management to consolidated buying power for promotional products distributors in North America.

Chris Lee, CEO, The Pebble Group

“With a new capital structure and no debt, The Pebble Group will be best placed to invest more readily in expansion, deliver on its growth strategy and enable its senior managers and employees to participate in the group’s success,” said CEO Chris Lee.

As a result of The Pebble Group’s listing, the company’s current majority owner – London, U.K.-headquartered private equity firm Elysian Capital – will go from holding a 77% stake in the group to a 14% stake. Elysian has agreed to retain its 14% interest for at least six months. The Pebble Group’s management will hold an approximately 9% piece of the pie.

When The Pebble Group began trading on AIM on Thursday, its market capitalization was reported to be £205.1 million – about $269.2 million. Alliance News reported that the group’s IPO and conditional placing on AIM consists of 75.4 million new shares and 53.5 million existing shares, and is with institutional investors. "I am very pleased to announce a successful conclusion to our IPO and plans to join AIM,” said Lee. “The fundraising is well supported by a broad range of significant investors, including a number of blue-chip institutions.”

Launched 24 years ago, AIM is a sub-market of the London Stock Exchange. It allows smaller companies to float shares with a more flexible regulatory system than is applicable to the main market.

Acquired by Elysian in 2017, Brand Addition is a Manchester, U.K.-based promo distributorship with a global footprint. It operates in North America through its St. Louis, MO-based Brand Addition USA, which is the former Gateway CDI. Brand Addition acquired Gateway CDI in 2016.

In November 2018, Elysian Capital acquired Facilisgroup. UK Investor Magazine reported that the acquisition cost £23.4 million – or about $30.3 million in today’s money.

At the time of the Facilis purchase, Elysian announced the formation of The Pebble Group – an entity focused on the promo industry that so far includes Facilisgroup and Brand Addition. The Pebble Group has nine offices, with locations in North America, Europe and Asia. UK Investor reported that The Pebble Group’s 2018 revenue was £93 million– a tally that would have risen to £99.8 million (about $129 million) if there had been a full contribution from Facilisgroup. Before transaction and reorganization costs, underlying profit for 2018 was reportedly £5.39 million – nearly $7 million.

Going forward, Lee will remain CEO of The Pebble Group, while Chuck Fandos will stay on as president. The pair is “as committed as ever to an exciting future with The Pebble Group,” Lee told Counselor.

Chris Lee placed 34th on Counselor’s 2019 Power 50, the definitive ranking of the most influential people in the promotional products industry. Counselor recently interviewed Lee in a podcast.