Corven Ventures Exits its Investment in Caterham Cars

LONDON, April 27, 2011 /PRNewswire/ -- The consortium led by Corven Ventures ("Corven"), the activist principal finance investor, has exited its investment in Caterham Cars ("Caterham") to Team Lotus Enterprises Limited ("Team Lotus"). Terms of the deal were not disclosed.

Caterham is the leading independent motorsport car manufacturer in the UK, producing over 500 cars in 2010, the highest volume in recent years. It is the manufacturer of the Caterham Seven, the iconic sports car first designed by Colin Chapman in 1957, which continues today to provide one of the most exhilarating driving experiences from a production car.

Corven acquired the business from the founding Nearn family in 2005 through a Management Buy In transaction, led by former Lotus Cars General Manager, Ansar Ali. Since then, the business has undergone a dramatic transformation.

The company's assembly plant is located in Dartford, Kent and the business has two UK retail sites located in Caterham and near Leicester. In 2008, Caterham established with Corven's support a chassis manufacturing capability at Westbury in Wiltshire. This vertical integration has provided not only a consistency of supply but also the cost efficiency that has been critical to Caterham's growth and profitability. Management have changed the production system from batch to line assembly, dramatically improving build quality and efficiency, as well as creating the platform for volume growth. Caterham employs 105 people across its sites, an increase of over 50% since the MBI.

The core product is the Caterham Seven, a lightweight sports car with legendary heritage having been first designed by Lotus founder Colin Chapman in 1957. Through ongoing investment in innovative engineering design, the Seven today still provides a market leading experience as a thrilling car to drive, whether on the road or race track. In recognition of this, the Caterham R500 variant was the Top Gear Car of the Year in 2008.

Caterham is the leading amateur motorsport business in Europe, with over 700 drivers competing in championships each weekend during the season. Further afield, the Seven is driven competitively in North America, the Middle East and Asia. The Caterham Academy, which trains novice racing drivers, is consistently sold out up to a year in advance and has introduced over 600 drivers into competitive motorsport. In the last three years, Caterham Academies have also been set up in Portugal, Holland and more recently France for the 2011 season. Over 22,000 people a year now drive a Caterham as part of driving experience days in the UK.

The strategic investment in the motorsport programme has also influenced new product development. This has been demonstrated through the unveiling of the SP300.R at the Autosport International show in January 2011. This is a milestone development for the company, with the car's contemporary new design taking Caterham's racing pedigree to the next level whilst remaining consistent with its brand values of performance through lightweight and affordable motorsport. The company will launch its first SP300.R race grid in 2012.

Corven has supported this transformation with capital, operational change and financial expertise, leading ultimately to the successful exit to Team Lotus. James Basden, Chief Executive of Corven Ventures commented: "The sale of Caterham marks the successful conclusion of the dramatic transformation of this exciting business under Corven and its co-investor's ownership. We are extremely proud to have played a role in the development from a traditionally run family business to what is today a highly professional motorsport based car company with a market leading position. This investment has proven Corven's investment model of applying capital with strategic change management expertise to transform high potential companies and to generate substantial shareholder value. Team Lotus is the perfect owner for Caterham to take the business to the next stage of its development and we wish Caterham, Team Lotus and Tony Fernandes the very best of luck for the exciting future ahead."

Notes:

Corven Ventures is the investment arm of the Corven Group, an integrated group of businesses all focussed on creating value from strategic change. We operate through the following divisions:

- Corven Ventures: an activist principal finance investor focused on UK special situation private company investment opportunities

- Corven Consulting: a global management consultancy and advisory firm with offices in London, Boston, Chicago and Hong Kong

- H-I Network: an exclusive network of leaders and innovators and operator of the Innovation Network, Operational Excellence Network and Corporate Venturing Network

We work as a single firm and draw upon and integrate these different capabilities when this delivers greater value to our clients and investments. This allows us to offer innovative and tailored solutions that we believe in.

For further information please go to http://www.corven.com.