Invoice discounting case studies
Second deal in nine months at property management company
A new refinancing deal has been completed at Integral Services Limited the UK's biggest independent outsourcing company for facilities and property management just nine months after a £20 million management buy-out.
This refinancing secures a £13 million balance sheet for the business and will provide the foundations for significant further growth.
The deal was led by Bristol-based Momentum Corporate Finance and funded by a package of debt and asset-based lending facilities provided by two divisions of Lloyds TSB, Lloyds TSB Commercial Finance and Lloyds TSB Corporate.
It sees the exit of the venture capitalist that backed the original MBO, Barclays Ventures, who more than doubled the value of their investment, from £5 million to £12.5 million.
Integral, which has its headquarters in Bristol, employs over 2,000 staff in 12 locations, with a 900-vehicle mobile maintenance fleet and around 400 clients, and turnover is set to exceed £130 million this year.
Last summer Momentum's partners, Tony Kenny and Rob Crews, acted as lead advisers to Integral's management team, led by managing director, Bryan Glastonbury, to complete a £20 million management buy-out of the company from its previous owner, Guinness Peat Group plc.
Now they have structured a further MBO to provide an exit for Barclays Ventures, and a balance sheet of more than £13 million.
The result is that Integral's management team now controls the business and are able to take the long-term decisions necessary to continue the rapid growth experienced in recent years.
Momentum's partners, Tony Kenny and Rob Crews, invested their own money to become minority shareholders in Integral Services at the time of last year's MBO, and have now increased their personal stake in the business, as part of the latest deal.
Finance was provided by Lloyds TSB Corporate's Bristol-based specialists, combining mezzanine and senior debt funding, in partnership with the bank's Acquisition Finance Team. Lloyds TSB Commercial Finance, which helped to fund both last year's MBO and this year's deal, put in place facilities which lend against the value of the firm's sales ledger.
The management team was advised by Paul Cooper at law firm, Osborne Clarke, while Lloyds TSB's legal adviser was Julian Kinsey of Bond Pearce.
Integral Services has grown extremely rapidly since last year's MBO, outperforming even the most optimistic plans put in place at that time, and further rapid growth is projected this year, says Momentum partner, Tony Kenny.
The fact that we are prepared to back the management team with our own money underlines our confidence in their ability to continue on its rapid growth path, he added.
Managing director Bryan Glastonbury commented: Integral is extremely well positioned as the UK's largest independent buildings maintenance business. This market leading scale appeals to our blue chip customer base which is increasingly looking to work with a buildings maintenance partner with a truly nationwide capability. We are able to offer our customers a two-hour response time anywhere on the UK mainland.
Peter Anderson, director, business development for Lloyds TSB Commercial Finance, said: The UK's facilities management sector is worth around £96 billion per annum and outsourcing is an area that continues to develop at pace. Intregral's management team has already driven significant growth in the business and this latest deal ensures that it has the control and the backing to continue making the most of this expanding market.
Clive Hetherington, Lloyds TSB Corporate's regional director for Large Corporate services said: "We have maintained a close working relationship with Integral's MBO team and this new package will bring significant cost savings for this highly successful business. In addition, the management team now has full equity benefit and can take a long term strategic view without having to plan for a VC exit. "
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