Nectar operator secures £25 million finance

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By: RickFerguson |

Posted on November 24, 2016

Nectar operator secures £25 million finance

Loyalty Management UK (LMUK) has secured a commitment of £25 million in equity financing for its Nectar programme, from private equity firm Warburg Pincus.

Chaired by Air Miles founder Keith Mills, LMUK will launch and operate Nectar, which brings together Sainsbury's, Barclaycard, BP, and Debenhams to form what the firm says will be "the UK's largest customer loyalty programme". The firm expects the programme to acquire more than 50% 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 programme that makes points collection and redemption easier for consumers, by bringing together several established rewards programs through four leading national retailers," said Rob Gierkink, CEO 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.

The programme will target over 12 million consumers who are currently members of programmes operated by the four retailers. Consumers can collect points from over 1,800 outlets, and from all their Barclaycard purchases.

Track record "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.

Schull continued, "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 programme."

Background The investment in LMUK is being made jointly by two funds, Warburg Pincus International Partners (a US$2.5 billion fund), and Warburg Pincus Private Equity VIII (a US$5.3 billion global fund that closed in April 2002). LMUK has been established by Loyalty Management International (LMI) to launch and operate Nectar. LMI has previously initiated other companies that have operated loyalty programmes in a number of different markets.

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