Working in partnership across Close Brothers divisions
A leading venture capital firm was acquiring a majority stake in one of the UK’s largest removal and storage firms. Having assisted on a number of management buy-ins for the client previously, their Broker contact introduced them to Close Brothers for their expertise to support with this type of transaction.
Majority stake for sale
The existing management team were looking to sell a majority stake in the business to the venture capital firm, which saw the company as a good fit for its portfolio of managed businesses.
Since incorporation in 1994 the target company had achieved sustainable and profitable growth both organically and through the acquisition of brands which have strong reputations in its local geographical regions. The business services the whole of the UK from nine sites and also has relationships with overseas partners allowing it to fulfil international removal services.
A joint effort
The finance solution required would need a joint approach from Close Brothers Business Finance and Close Brothers Invoice Finance divisions to facilitate the funding.
The broker introduced the proposal to Barry Joughin, Business Development Manager at Close Brothers Business Finance and Andrew Metcalfe, Deputy Head of Sales North and Midlands at Close Brothers Invoice Finance. After assessing the company’s credentials and finding a robust balance sheet with sustainable, high levels of profitability being generated, Close Brothers did not hesitate in offering full support in putting tailored funding facilities in place.
Unlocking capital from existing assets
Close Brothers Business Finance provided a Sale and HP Back product against the company’s motor vehicles over four years. In addition to this, a further £450,000 Sale and HP Back product was proposed over a two year period with security against storage containers used in the removals industry.
Alongside this Close Brothers Invoice Finance provided a new Invoice Discounting facility on its IDealTM platform with credit protection and a prepayment of 90% and a facility limit of £1,800,000.
Invoice discounting is an alternative solution to traditional types of business finance, which provides instant access to cash tied up in outstanding invoices. The facility adapts with a business as it changes and grows, making it much more flexible than an overdraft or loan. The market leading IDealTM technology enables instant access to cash from a client’s invoices 24/7.
From strength to strength
The broker commented: “This was a great joint effort by Barry, Andrew and the teams of Close Brothers Business Finance and Close Brothers Invoice Finance, in providing the funding our client required. The money released from the existing assets enabled the acquisition. In addition, by refinancing the acquired business, it has consolidated its debts and further aided cash flow.”