Lloyds TSB Commercial Finance has completed its first cross-border private equity deal, providing £26 million of asset based lending (ABL) facilities to support the £52 million Rutland Partners-backed MBO of the CeDo Group.
The CeDo Group is a leading pan-European provider of disposable household products such as bin liners, food & freezer bags, cling film and aluminium foil. The business supplies most of the leading retailers throughout Western Europe and is now expanding internationally.
With a turnover of £185 million and employing over 1,500 people, CeDo operates from three manufacturing sites including a large facility in Telford, Shropshire.
The buyout was facilitated by a complex capital structure comprising private equity funding from Rutland Partners, a cross-border ABL package from Lloyds TSB Commercial Finance and a mezzanine tranche provided by Indigo Capital.
Lloyds TSB Commercial Finance put in place receivables finance facilities in the UK, Germany and France. It also provided a UK stock finance facility loan against the plant and machinery at the Telford factory, as well as manufacturing plants in Poland and China and a recycling plant in the Netherlands.
ABL sits comfortably alongside debt and equity in a deal structure and is able to provide tailored solutions for businesses of all sizes, from SMEs right up to multinationals with complex cross-border requirements.
By working in conjunction with the corporate finance community, syndicates can be formed which are capable of releasing enough funding to complete major transactions.
Piers Harmer, Director, Business Development at Lloyds TSB Commercial Finance, said: “This transaction is the first European MBO of its kind to use a combination of ABL, private equity and mezzanine capital and demonstrates that ABL is a highly effective tool for supporting private equity-backed deals.
“We look forward to helping the company to execute its expansion strategy and continuing our long standing relationship with management, Rutland Partners and Indigo Capital.”
Lloyds TSB Commercial Finance also introduced the business to another division of Lloyds Banking Group, Lloyds TSB Corporate Markets in Birmingham, which provided €8m of ancillary banking facilities.
Lloyds TSB Commercial Finance was well placed to fund the Group’s Western European assets due to its own European network of seven offices across the continent.
Christopher Hart, Director, International Sales at Lloyds TSB Commercial Finance, added: “This deal is an example of how, working together, our UK and European teams can offer an international product which few others can match.”
PricewaterhouseCoopers and DLA Piper advised on the deal.