ThinCats has successfully completed a transaction for the Management Buy In (MBI) of Scubair Ltd, a business involved in the design, installation and service for all types of air conditioning, ventilation and electrical systems. The Newbury-based company is a portfolio business of Venture Equity Partners, the buy and build investment specialist group.
ThinCats supported the MBI with a £550,000 funding facility, enabling the realisation of value for the shareholders on exit and the on-going growth potential of the business.
Ciaran Greenwood, Group Finance and Commercial Director at Venture Equity Partners, commented: “In Scubair, we identified an excellent opportunity to break into a new sector and to acquire a strong platform company as the basis for a buy and build strategy to further broaden our facilities management offering.”
“We knew we would need to partner with a different type of funder than we have done in the past. Traditional high street lenders have had a significantly reduced appetite for Management Buy Ins in recent years, and with the additional complication of the construction sector taking payments on application, invoice discounting was excluded as a suitable facility. Our adviser recommended that we should speak to ThinCats to discuss alternative debt funding options.”
Ms Greenwood continued: “ThinCats structured a cash flow loan facility designed around the needs of the business and the transaction, providing security for the existing 26-strong team at Scubair and the longevity of the brand, together with the opportunity to take the business to the next level of growth. When working on a transaction with any funder, it’s critical to know that what you have agreed is what gets delivered and that is certainly our experience in working with ThinCats. Everything we agreed verbally was followed up legally and reflected in the deal structure.”
“The senior team at ThinCats is impressive and responsive as well as being particularly easy to work with. We have ambitions to make further platform and bolt-on acquisitions. With ThinCats, we have the ideal alternative finance partner in place for these types of transactions.”
Andrew Tapsell, business originator, South Coast at ThinCats added: “We wish Scubair every success with the business going forward. This management buy in transaction highlights how our solutions can be applied in sectors and circumstances where invoice discounting and asset-based lending cannot. Every deal we see is different but the one thing that remains consistent is the delivery of our promises.”
“Businesses are finding that there are significant challenges in funding MBI deals in the current marketplace from traditional high-street lenders, despite the prior proven success of the team, continuation of existing shareholders and additional security given through cross guarantees from companies with similar shareholdings. We are seeking to fill that important gap and back great businesses with ambitions to grow.”