|Service:||Discounting and Cash Flow Loan|
|Outcome:||Management Buy In|
Following a period of continued growth, the company has built up a strong balance sheet and market position from which to realise further expansion opportunities. The current shareholders were looking to retire and realise their value in the business. Together, they considered that under new directorship, the business would be ideally placed to achieve the next phase of its growth plans.
Chris Honer, an experienced executive within the sector, has known the vendor for over 20 years and could see that the business presented a platform for significant further expansion.
Praetura Commercial Finance structured a £3,550,000 facility, comprising of a Confidential Invoice Discounting line and Cash Flow Loan. The deal will enable the incoming Managing Director to purchase 100% of the share capital of the target company, facilitating the retirement of the founding shareholders, and realising his long-term strategic plans to drive the growth of the business.
Chris Honer, the incoming MD of Swift Electrical Wholesalers (SOT) Limited, said: “Ultimately the success of this transaction is about working alongside like-minded people. I clicked with the team at Praetura Commercial Finance immediately. Their team constructed the proposition quickly, enabling me to approach the target with a firm offer and turned around the transaction in an extremely smooth manner. Nothing was too much trouble. They were very open and collaborative and the regular flow of communication has been excellent.”
He continued: “I have known the target business for over 20 years and it’s something of a sleeping giant, having been run very successfully as a lifestyle business. The funding structure presented by Praetura Commercial Finance has created the potential to transform the business, allowing for further investment in its infrastructure, the implementation of an effective segmentation strategy and the opportunity to build a strong digital presence.”
Tim Scott, Managing Director, Cleveland Scott Limited, who advised the vendor on the disposal and introduced the transaction to Praetura Commercial Finance, added: “This was a fantastic deal for the shareholders and the company and with Chris at the helm, the Swift name, culture and reputation for high quality service will continue in earnest. Chris has known the business for a very long time; he understood the key dynamics and drivers of the business and had a clear growth plan in place. Praetura Commercial Finance played a big part in the deal, taking a very pragmatic and commercial approach. Their smooth due diligence process and speed of response were key to securing the transaction.”
Stuart Bates, Commercial Director of Praetura Commercial Finance commented: “We were delighted to support Chris Honer in acquiring a profitable business that offers phenomenal potential for growth. The key with MBI transactions is to generate sufficient funding to support the purchase consideration, as well as to ensure that the right level of working capital is available for the new owner to take the business to the next level. The combination of a revolving confidential invoice discounting line, in addition to a cash flow loan, is ideally suited to MBI situations such as this.”