We are seeing a significant uplift in enquiries for funding assistance to help support the increasing numbers of mergers and acquisitions that are taking place, with asset refinance proving to be a valuable tool to help raise the necessary funds for both MBOs and MBIs.
Very recently at Praetura Asset Finance (PAF) we’ve assisted a long-term employee complete a management buy-out of a forestry plant hire depot. The company he worked for were looking to scale down their business including selling their existing regional depots. Releasing the equity from the depot’s vehicles, plant and machinery leveraged £230,000 (through the refinance of 29 assets over a 60 month term) – a substantial portion of the funds required. The buy-out has now gone through and the former General Manager of one of the regional depots now owns that business.
Another deal facilitated by PAF was for a precision engineering company looking to raise funds to facilitate a management buy-in to enable the company to diversify and grow. Initially the valuation of the equipment fell short of the desired funding levels, but an increased LTV level was approved with accelerated payments for the first 12 months to overcome this obstacle. £441,000 was raised through the refinance of multiple engineering equipment assets, which was a significant percentage of the final total needed to complete the MBI.
Whether it’s a management buy-out or buy-in, these deals are seldom straight-forward. With numerous parties involved they can be complicated and time consuming. But they don’t have to be complicated for the broker or the client, if you are working with a funder with specialist knowledge and expertise in this area, something I’m proud to say that the team at Praetura are renowned for – as the broker who we worked in partnership on the MBI deal mentioned above commented:
“PAF’s expertise shone through throughout the whole process. Their assistance, adaptability and knowledge were invaluable. Praetura made a complicated deal simple and hassle-free, and we now have a very satisfied client and a business looking forward to a bright future”.
Often with MBOs and MBIs an additional funding tool utilised alongside asset refinance is invoice finance. Thanks to the latest addition to Praetura’s Lending Division: Praetura Invoice Finance (PIF), the Praetura team are now able to assist with this area too. Working to the Praetura Group’s principles of providing ‘more than money’, the team at PIF are keen to adapt PAF’s consultative approach to lending to the world of invoice finance funding – led by Managing Director Ray Lowrey, who has more than 30 years of experience in commercial finance who joins from Bibby Financial Services, with Sales Director Carl Finlayson and Operations Director Lorraine Udale making up the rest of the senior management team.