Management buy-back for Morph group

Edinburgh-based AFG Media has re-taken full control of the business after buying out a minority stake held by private equity group BGF.

AFG Media, launched in 2009 by Ali Smeaton, Fraser Smeaton and Gregor Lawson, is the parent company of MorphCostumes which makes Morphsuits – in the style of the former TV character – as well as fancy dress and inflatable costumes for parties, Halloween and other occasions. In total it has 1,200 varied designs sold to customers all over the world and has 68 employees.

It recorded a £42 million turnover in 2023 with most of its sales being made via Amazon across 12 countries with additional US sales coming from major retailers such as Target and Walmart. It started selling products in Mexico this year, following the addition of Canada as a distribution market in 2023.

The events and party industry took a hit from the Covid pandemic but has since made a recovery as people returned to going out to events and parties. People also increasingly take pictures of themselves wearing costumes to create social media content.

BGF bought a minority stake in the company for £4.2 million in 2021 and has helped drive its international growth and range of costumes. It also supported AFG’s merger with Digital Dudz in 2013 and acquisitions including Fun Shack in 2019.

BGF’s exit was achieved through a company and management buy-back.

Fraser Smeaton, co-founder, said: “BGF invested at a vital time for our business, and we are hugely grateful for its patience in some of the tougher times, particularly through the Covid-19 pandemic, as well as the breadth of the support they provided over the last twelve years. We are now focused on scaling the business further, entering new markets and developing incredible new costumes.”

Patrick Graham, head of Scotland and Northern Ireland at BGF, said: “It’s hugely gratifying to hand our minority stake back to the owners and wider AFG Media team after twelve years of close partnership. The business today is almost unrecognisable to the one we invested in, and we firmly believe that our patient approach was central to realising the huge potential of Fraser, Ali and Gregor’s eye-catching original idea. I look forward to following the company’s future successes and seeing their unique products popping up in ever more far-flung locations.”

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