Project Summary: Advanced Innergy Solutions (AIS)

We are delighted to have provided transaction support to the management of Advanced Innergy Solutions (AIS) in their secondary management buy out of Growth Capital Partners, funded by Barclays and HSBC. AIS is a global manufacturing leader specialising in insulation, passive fire protection and subsea umbilicals, primarily serving the marine and energy industries.

This transaction was complex in nature given the inclusion of a Club UK Export Finance Trade Facility alongside a traditional two Bank working capital and term loan funding package. The key to a successful completion was the open mindset to find solutions of all parties involved and it was a pleasure to work with the AIS management and banks concerned once again.

Funding Need: Secondary MBO

Facility: Syndicated Term Loans and UKEF Trade Finance

Sector: Manufacturing

Value: £69m

Date: August 2024

Andrew King, CFO, Advanced Innergy Solutions commented “We asked Paul to support us on this transaction having worked with us on the CRP acquisition previously. His experience, negotiation and project management skills really pushed the deal along when required. We would recommend Paul to any management team looking for debt advisory or transaction support.”

Project Summary: Set-A-Side Storage

We are delighted to have provided debt advisory support to Billy Morley to assist him with his acquisition of Set-A-Side Storage funded by Shawbrook Bank. The transaction represented a sale by the founders who established the business in June 2000. Set-A-Side provides set, prop and costume storage to the UK’s rapidly growing TV and Film sector.

The key to structuring transactions of this nature in the sub £5m centres on ensuring the business has suitable headroom during the transition, enabling the management team to focus on establishing new relationships and growing the business. The case was no different with Set-A-Side and it was a pleasure to work with Billy on this very exciting project.

Funding Need: Management Buy In

Facility: Term Loan

Sector: Transport and Distribution

Value: £5m

Date: Q1 2024

Billy Morley, Managing Director, Set-A-Side Storage commented “Set-A-Side provided the ideal platform for me to start to build a diverse storage business and having someone like Paul with his considerable experience of funding transactions of this nature made the whole process far easier to navigate. I would have no hesitation in picking the phone up should I require any further funding support in the future.”

Project Summary: Mole Valley Farmers

We are delighted to have provided debt advisory support to Mole Valley Farmers in partnership with Barclays and Leumi. Mole Valley Farmers Limited are a leading agricultural co-operative headquartered in North Devon. The group operate 55 locations nationwide providing a wide range of products to the agricultural sector through its retail stores, as well as a comprehensive provision of feed manufacturing, farm nutrition and soil agronomy products and services.

It was an absolute pleasure to work with Bruce and Steve once again to help deliver a bespoke funding solution, which supports growth whilst providing headroom to assist with managing the seasonal needs of a large agricultural business.

Funding Need: Working capital and growth funding

Facility: Asset based lending and trade facilities

Sector: Agriculture

Value: £60m

Date: May 2024

Bruce Korican, CFO, Mole Valley Farmers commented “This is the second re-finance project that Paul has advised us on and once again, he has delivered excellent value throughout. His input, guidance and support was a key element in securing several funding offers that enabled us to obtain the best / most appropriate overall facility. I have no hesitation in providing a 10/10 recommendation for Paul.”

Virtual Deal Team

In the past 12 months experience has also shown funders need more than debt advisory advice to solve their requirements.

To this end we have built a network of advisory support centred on:

financial modelling;

internal financial reporting;

corporate finance advisory;

due diligence;

real estate and

corporate and banking legal advice.

Every project is different and we can now provide management teams and owners with the virtual deal teams bespoke to each requirement.

Working with individuals with considerable experience having worked in the major firms or industry, we can provide bespoke solutions at a price to suit the budget, where those doing the work are the people you engage with.

If we can’t directly support, we usually know someone who can!

Contact us here

So do you have a Debt Strategy?

2022 so far has been a year of largely negative market sentiment because of a variety of factors including inflation, supply issues, increasing interest rates, regional war, political instability and probably many more. As a result, many recent conversations with clients and the professional community have generally centred on the threat of lower growth and the possibility of an economic recession. Equally, there remain many sectors managing unprecedented growth and the challenges that brings for funding.

So what does this mean for companies and their debt strategy?

Whether your business is in a growth or turnaround phase having a clear debt strategy is fundamental to good corporate governance. You need to know your options should opportunities or threats arise and ideally have strong relationships to implement quickly if required.

Debt Capacity

The start point for any debt strategy is to understand the debt capacity of the business, how much could you borrow. This requires a review of the business, including the quality of its cashflows and assets and the sustainability of earnings, amongst other factors. The assessment doesn’t start with what your bank could fund, more what the wider debt market could, which will usually be materially different.

Financial Management & systems

To facilitate this review a business will need strong financial management and systems or be open to these being improved or supported by external assistance. The ability to produce forecasts including cashflow should be second nature to most established businesses but this isn’t always the case but is a critical success factor to a debt raise where the amount involved is a material increase or when trading is softer than the budget.

Accurate forecasting

At times of greater uncertainty forecasting becomes much more difficult. This is best mitigated using a financial model that enables the numbers to be sensitised both up and down. If the core systems can’t support this, producing a separate transaction model will give the funder a bit more confidence on the forecasts.

Diversity of funding options

Most companies know the high street banks and a small number of assets based lenders to fund vehicles and equipment. That said, many don’t have established relationships with a back-up funder should their main lender have limited appetite for the business in the hour of need. They also don’t know the potential solutions from well over 100 alternatives funders in the market.

Next Steps

Understanding the debt capacity of your business, having the financial systems to support a funding request and knowing and building relationships with the most relevant funders for your business is not as straightforward as it used to be. Timing is also everything.

So if you would like help building your debts strategy, please contact Paul Wood here to explore whether Funding Compass can help.

Funding Compass is a consultancy business focused on strategic & debt advisory and transaction support.

Evona

Delighted to announce completion of the first debt fundraise for Evona, an award winning fast growing business in the Space sector. Funding was provided by Investec.

Evona is a fast growing specialist recruitment business, with particular focus on Space sector.. The business was established in Bristol in 2017 by four individuals (Jack Madley, Tom Kelly, Richard Joyce and Ryan Hill) who had previously built successful teams within larger groups having seen the opportunity for a sector focused approach to a growing global market.

Phase one has been to fund growth the UK and European markets with the establishment of the company’s second office in Manchester with further expansion planned for Glasgow and… over the next 12 months.

The company recently won Business of the Year at the Lloyds Bank British Business Excellence Awards and fab four were also included in the 42 under 42 in the recent Insider review!

Beyond the UK, the business is currently establishing its presence in the US where it is looking to build on its already growing 100 clients globally. At Funding Compass, we now move our attention to funding this growth via the US market, as well as supporting the team with their wider strategic ambitions.

Tom Kelly commented “Paul has been instrumental in de-coding the complex investment landscape. He secured us the funding we were looking for. It’s evident Paul has unrivalled knowledge in this domain and we’re delighted to continue our relationship on an advisory basis.”