Vantage Capital has provided approximately R80m ($7.28m) of funding to facilitate a management buy-out of Dynamic Bedding, South Africa’s largest specialist bed group.

David Kornik, Associate Partner at Vantage, said: The transaction is a great example of how Vantage was able to use innovative structuring to facilitate an exit for a private equity investor whilst simultaneously empowering management by enabling them to double their equity stake in the business.”

Dynamic Bedding manufactures, distributes and markets a wide range of bed bases and mattresses that are sold through its national network of 120 retail stores, giving it the largest footprint of any specialist bed retailer in the country.

Operating under the brands The Bed Shop and Bed City, the stores are located across all nine provinces of South Africa as well as several stores in Botswana, Namibia and Zimbabwe.

The stores are predominantly independently owned and managed by franchisees that source their beds and mattresses from Dynamic Bedding’s manufacturing facilities located in Krugersdorp just outside of Johannesburg.

According to Luc Albinski, Managing Partner at Vantage, the business has performed resiliently through challenging economic conditions thanks to a robust business model and a strong management team, providing a stable base off which to drive substantial further growth.

“The owner-manager model has proved itself in the current environment and Dynamic Bedding continues to produce good results in a troubled furniture sector. Tightly managed and focused mid-market businesses like Dynamic Bedding are the bread and butter of our mezzanine finance business,” he said.

Gordon Bridger, Managing Director of Dynamic Bedding, added: “We look forward to working closely with Vantage on our strategic business plan in order to take advantage of the attractive growth opportunities that we have identified.”

Dynamic Bedding is the ninth mezzanine transaction in Vantage’s second fund of R1.9bn which is now largely invested.

Vantage has commenced the raising of its third mezzanine fund which is expected to close in the next couple of months at R2.5bn to R3bn.