Lloyds TSB Commercial Finance has provided a £35 million receivables finance line to part fund the management buy-out (MBO) of Encon Group, led by Stuart Moore, from its parent company Wolseley UK, securing the long term future of its UK wide 500+ employee base.

Established in 1981, Encon is a leading distributor of insulation and fire protection products, dry lining, suspended ceilings and partitioning to all sectors of the construction industry from major contractors and house builders to specialist sub-contractors.

The £194 million turnover business is headquartered in Wetherby, West Yorkshire and has a network of 24 sites across the UK.

By leveraging the value of Encon’s sales ledger, the asset based finance facility from Lloyds TSB Commercial Finance provides an important source of flexible financial headroom to support future growth. 

Encon managing director Stuart Moore has been with the company for  23 years and is looking forward to building on its previous successes.

The business’ expansion strategy will concentrate on organic growth, executing plans to open new sites and increase its geographical reach, as well as expanding its partitioning and roofing product lines. It also plans to develop a range of sector-specific solutions to target selected customer segments.

Wayne Mills, Business Development Director in Lloyds TSB Commercial Finance’s Major Corporates division, said: “As the property market gradually improves and increasing environmental legislation means older buildings are refurbished to meet new energy efficiency standards, the insulation market is expected to expand.

“Encon is well placed to capitalise on these market dynamics, with its broad geographic coverage and established reputation in its chosen markets.

“Asset based finance is increasingly being used as part of the M&A and private equity funding mix, as it strongly complements other types of debt in deal structures. This transaction represents a valuable opportunity for Lloyds TSB Commercial Finance to support the MBO of a valued Lloyds Bank customer.”

Carly Burrows, Relationship Manager, Lloyds Bank Corporate Markets commented: “We are delighted to be able to continue to provide day to day banking requirements to the Encon Group as it becomes a standalone business.  We are proud to support our core UK clients through the cycle, by providing best-in-class relationship management expertise.”

Stuart Moore added: “As the new owner of Encon, I believe we have an excellent opportunity to drive the business forward and I truly believe we have an exciting journey ahead of us.”

Lloyds TSB Commercial Finance and Lloyds Bank Corporate Markets were advised by Wragge & Co and Stuart Moore by Irwin Mitchell.