Newfield Fabrications Company Limited (“Newfield”) was a family run business based in Sandbach, Cheshire that had been trading since 1965. The business worked across a number of engineering industries specialising in producing high quality mild steel fabrications with a range of finishes to suit customer requirements.
The owner was looking to retire and sell the business to a management buy-in team.
For Close Brothers Asset Finance, this was an opportunity to help an experienced group of professionals looking to acquire a well-regarded business with a strong track record of profitability.
As part of the deal, it was agreed that the existing Managing Director would remain in situ, to ensure the smooth running of operations.
The finance solution required a joint approach from both Close Brothers Asset Finance and Close Brothers Invoice Finance to facilitate the acquisition.
Close Brothers Asset Finance provided a Sale and HP Back product against the company’s machinery over five years, while Close Brothers Invoice Finance provided a new Invoice Discounting facility with a Cash Flow Loan to be amortised over a three year period.
The agreed finance package facilitated a smooth handover to the new owners with the added benefit of knowledge retention and succession planning to ensure the continued long-term success of the business.
John Fowler commented: “This was a great joint effort by Richard Kirk, Andrew Metcalf and the teams of Close Brothers Asset Finance and Close Brothers Invoice Finance, in providing the funding we required. The money released from the existing assets enabled the acquisition. In addition, by refinancing the acquired business, we have consolidated debts and further aided cash flow.”
Finance products explained
Sale and HP Back is a form of refinance that can be used against most types of equipment, making it suitable for companies of all sizes, including sole traders. It works by the funder purchasing the asset and financing it back to you. Repayments are calculated in line with the income stream that will be generated by the asset and at the end of the refinance term, you own the asset
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.