Hireline Ltd was established in 2010 by owner Pat McCluskey. It is an independent family owned business that specialises in the hire of plant and small tools to the Scottish construction industry.
Back in 2010, Pat McCluskey was running the Scottish branch of Ambrose Plant Hire Ltd, a large plant hire and small tool hire business.
Pat had identified an opportunity to acquire the business, and planned to create a new company called Hireline Ltd to do so.
Pat had personal capital for the deal, but realised he would require additional external funding to finance the acquisition, something that would be extremely difficult to come by in the banking climate at the time.
He was also aware that time was of the essence if he was to secure the business at the best possible price, whilst also maintaining trading momentum during the transitional period.
Pat met with Martin Brown, the Scottish construction specialist at Close Brothers Asset Finance to talk about potential funding solutions. Martin quickly recognised that Pat had put together a comprehensive, convincing business plan that confirmed that he could run the company profitably with slimmed down overheads and a tight control of costs.
It was agreed that the personal capital that Pat could inject would cover the goodwill element of the transaction and Close Brothers would provide a £175,000 facility that would fund the fixed assets of the target business.
There was a considerable amount of work put into the deal, not least in working in conjunction with the various advisers involved in order to conclude the transaction on the planned date.
On the agreed date the funds for the acquisition were jointly provided by Pat McCluskey and his business partner John Gillan of P1 Solutions and Close Brothers Asset Finance. The package comprised a four-year hire purchase facility that was structured around the projected cash flow of the business.
In the 12 months after drawdown of the asset finance facility, the business doubled its turnover. It also managed to turn a profit in year one of trading, which is very unusual, and is continuing to thrive now.
Managing Director of Close Brothers Asset Finance in Scotland Colin Swanston said: "Asset finance is often overlooked as a possible funding method for the acquisition of a business.
"In many cases the target company has good quality fixed assets that can be used to release capital as part of the overall consideration paid by the buyer. The only criteria that must be met is that the assets are identifiable and are suitable for asset finance.
"A fixed term finance agreement can be structured around the future revenues of the business and the useful working life of the assets," he added.