Family-owned James C Gillespie Engineering of Kirkcaldy, Fife had a history of providing high-quality precision engineering services to a wide range of customers across the UK. When the Gillespie family decided to sell the business on, a new management team came forward with plans not only to maintain, but to enhance the company’s services through their employees, customers and supply chain.
However, new investors Bill Taylor and Bob Waterson would need a cash injection in order raise sufficient funds to acquire the new business, and make a start on their plans for its development and growth. This is where Close Brothers was able to help, with an innovative asset-based lending (ABL) facility.
The new management team required funding to purchase the business. A potential source of these funds was to release equity from assets within the business itself. This was a complex transaction, where the funds to buy Gillespie would need to be released at the very moment the team acquired the business. For this kind of simultaneous, multi-faceted transaction to run smoothly, the new management team - and the Gillespie family - needed to make sure they had the right teams around them with the specialist knowledge they required.
Advisory firm FRP introduced the Investors to Angus Armstrong at Close Brothers Invoice Finance. Angus contacted James Waterson from Close Brothers Asset Finance and the pair put together a funding proposal on an asset-based lending basis; where equity can be leveraged from the target business in order to acquire it.
The funding solution agreed was a Sale and Hire Purchase Back agreement, which would provide the management team with the funding boost required to acquire the business and begin to put their growth plans into place.
James Waterson: “Securing the right funding for the Gillespie management buy-out was the work of a number of different teams; each providing specialist knowledge and each essential to the process. Close Brothers was able to provide the specialist finance solution, but it has to be said that this transaction simply would not have been possible without the advice of our lawyer Tim Cooper from Addleshaw Goddard, or the accurate valuation work from Sweeney Kincaid.”
This was an unusual transaction, needing a specialist finance provider that:
- Understood the aspirations of both the sellers and the new management team
- Understood the value within the business
- Had the specialist knowledge to provide the refinance facility
Angus Armstrong: “With this ABL finance package we were able to support the aspirations of both the Gillespie family and the new management team. The Gillespie Engineering case is a great example of how Close Brothers’ innovative funding solutions can help our customers achieve their business goals.”
Bob Waterson: “When FRP aligned us with Close Brothers, they weren’t the only option available to us however the ability of Close Brothers to understand the structure of the deal we wanted with James C Gillespie Engineering, and their innovative approach to delivering the right solution for us, meant we were able to get what we wanted, when we wanted it and how we wanted it. We are delighted with the solutions provided by Close Brothers and it has helped us get off to the best possible start in our latest business venture.”