LONDON, July 2 /PRNewswire/ -- Following news that four of the UK's
leading retail brands are joining forces to launch a new consumer loyalty
program, Loyalty Management UK (LMUK) announced that it has secured a
commitment of 25 million pounds in equity financing from Warburg Pincus, one
of the leading global private equity firms.
LMUK will launch and operate Nectar, which brings together Sainsbury's,
Barclaycard, BP, and Debenhams to form the UK's largest and most comprehensive
customer loyalty program, which is expected to sign up over 50 percent of all
UK households following its autumn 2002 launch.
"We intend to transform the loyalty landscape in the UK by developing the
first fully integrated loyalty program that makes points collection and
redemption easier for consumers by bringing together several established
rewards programs and four of the leading national retailers," said Rob
Gierkink, Chief Executive Officer of LMUK. "We are delighted to partner with
Warburg Pincus and its support enables us to put in place the financial
foundation for the successful launch and development of LMUK," he added.
Nectar will target the more than 12 million consumers who are members of
points and rewards programs currently operated by Sainsbury's, BP, Barclaycard
and Debenhams. Nectar offers consumers the ability to collect points from
more than 1,800 Sainsbury's, Debenhams and BP outlets and with all Barclaycard
purchases. Points collected in the Nectar program will be exchangeable for a
wide range of rewards like grocery discounts, consumer goods, flights,
holidays, restaurant meals, family days out and cinema tickets.
"LMUK's management team has a unique and distinguished track record of
building and operating coalition loyalty schemes in a variety of markets
including the UK," said Joseph Schull, a Warburg Pincus Managing Director.
"This is an opportunity to back an outstanding management team and build a
durable business in a market that is ripe for consolidation. In evaluating
this investment opportunity we have been very impressed with the vision of the
four launch Sponsors and with their commitment to making Nectar the UK's most
successful loyalty program. This investment also builds upon our experience
and track record of investing in business information and marketing services
companies worldwide over the last three decades."
The investment in LMUK is being made jointly by two funds, Warburg Pincus
International Partners, L.P. a USD $2.5 billion fund, and Warburg Pincus
Private Equity VIII, L.P. a USD $5.3 billion global fund that closed in
Note to Editors:
Warburg Pincus is one of the largest private equity investment firms in
the world. Working in partnership with management teams, Warburg Pincus has
taken an active role in building businesses, including companies such as
Mattel Inc., UnitedHealth Group, Inc., Dime Bancorp, Inc., Mellon Bank
Corporation, Knoll, Inc., Aegis Group plc, Information Holdings, ADVO, Calyx,
Channel 5 Broadcasting Ltd, BEA Systems and VERITAS Software Corp. Throughout
its 30-year history in private equity, Warburg Pincus has invested at all
stages of a company's life cycle, from founding start-ups and providing growth
capital to leading restructurings, recapitalizations and buy-outs. Since
1971, Warburg Pincus has invested more than $12 billion in 450 companies in
29 countries. The firm currently has $10 billion under management, with an
additional $7.5 billion available for investment. Further information is
available at http://www.warburgpincus.com.
LMUK has been established by Loyalty Management International (LMI)
specifically to launch and operate Nectar. LMUK is Chaired by Air Miles
founder Keith Mills and its management team has more than 100 years'
experience in implementing and running large multi-company customer loyalty
programs. LMI has previously initiated companies that have been operating
loyalty programs in numerous markets for a total of 35 years.
Nectar will be a new coalition reward program and will be
launched in the UK in the fall. Nectar has brought together leading UK
retailers -- Sainsbury's, BP, Debenhams and Barclaycard to offer UK consumers
a superior loyalty program that truly rewards customers on everyday purchases.
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SOURCE Warburg Pincus