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Shard Credit Partners backs simultaneous management buy-outs of BW Legal Services Ltd and PRAC Financial Ltd

Shard Credit Partners backs the simultaneous management buy-outs of BW Legal Services Limited and PRAC Financial Limited in the North East by co-founder and COO Rachael Withers.

 

Shard Credit Partners announces the completion of the management buy-outs (“MBO’s”) of both BW Legal Services Limited (“BWL”) and PRAC Financial Limited (“PRAC”, together, the “Group”) by Rachael Withers, COO and co-founder of both businesses.  The two side-by-side MBOs completed and funded simultaneously on February 8th, 2019.  Shard Credit Partners acted as exclusive financing provider, underwriting £13.5 million of committed senior secured unitranche facilities to complete the two deals.  The innovative financing structure has enabled the simultaneous refinancing, recapitalisation and shareholder re-organisation of the Group, whilst also providing committed acquisition firepower to grow the businesses.

BWL was founded in 2009 by Rachael Withers and Sean Barton and is the UK’s largest independent law firm specialising in debt recovery services and is dual regulated by both the Financial Conduct Authority (“FCA”) and the Solicitor’s Regulatory Authority (“SRA”).  The Group is based in Leeds, West Yorkshire and employs around 250 staff.  BWL acts as a one-stop-shop for high volume debt collection and litigation, focussed on delivering market-leading recovery solutions in an ethical and fair manner to clients in both the highly regulated consumer debt sector as well as the traditional commercial debt sector. Clients range from established sectors such as debt purchasers, financial services, private parking, commercial and energy.  PRAC is an FCA regulated debt purchase vehicle that acquires portfolios of non-performing consumer and commercial debt.

Withers is one of the first ever non-lawyer owners of a debt recovery and litigation law firm.  She has been responsible for running some of the largest collection and litigation projects in both the commercial and consumer credit environments, including one of largest insolvency collect-outs in British corporate history for the administrators on Entertainment UK, a group company of Woolworth Group that had syndicated lenders funding aged debtors with a value in excess of £360 million at the time of administration.

Andrew Madden at Gateley plc (“Gateley”) acted as legal adviser to Shard Credit Partners.  Andrew Cowan at Gateley led the legal due diligence review.  John Connor at Womble Bond Dickinson (“WBD”) acted on behalf of both BWL and PRAC.  Grant Thornton (“GT”) was appointed to conduct financial due diligence for the Lender.  BWL and PRAC were advised by Andy Haigh at BHP Corporate Finance (“BHP”), a corporate finance advisory business based in Leeds and Sheffield.

Shard Credit Partners has now completed three investments from its inaugural fund, with its second and third investments both completing on the same day (February 8th, 2019).  In addition to the simultaneous MBOs of both BWL and PRAC in Leeds, Shard Credit Partners also completed and funded the MBO of GadCap by its senior management team in Newcastle on February 8th, 2019.

 

Greg Lomas, CIO of Shard Credit Partners commented, ‘completing two, let alone three MBOs in one day is a first for us, we very much look forward to completing our fourth investment in the coming weeks’.  Following these investments, Shard Credit Partners Fund I will be around one-third deployed.

 

Typically, Shard Credit Partners aims to invest as the sole finance provider through senior secured unitranche loan structures, in amounts of between £5-15 million per borrower.  Alastair Brown commented, ‘the overall strategy is to invest where we can provide transformative growth capital to unlock a faster rate of growth than would otherwise be achievable with more traditional forms of lending.  The Fund’s first investment into SKS Business Services Ltd in May 2017 has already resulted in a doubling in customer numbers and EBITDA for that business in less than one year’.

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Shard Credit Partners backs management buy-out of GadCap Technical Solutions Ltd

Shard Credit Partners backs the management buy-out of GadCap Technical Solutions Ltd in the North East by its senior management team

Shard Credit Partners announces the acquisition by way of a primary management buy-out (“MBO”) of the business and assets of the power generation and aerospace solutions (“PGAS”) division of a multinational engineering conglomerate in the North East of England.  The new business will be called GadCap Technical Solutions Limited (“GadCap”) and is based in Washington, Tyne and Wear.  The MBO completed and funded on February 8th, 2019.

The MBO is being led by Michael Baker and Paul Seccombe, a pair of experienced engineers who have worked together in the business being acquired for a combined total of more than thirty years, since 2002.  The team will implement a programme of organic growth to further develop the GadCap business internationally, with a particular focus on growing their share of the aerospace and energy and power engineering markets in the Middle East, China and Asia.

GadCap designs and manufactures market-leading bespoke engineered products for the power generation and aerospace industries.  The PGAS division is the only business in the world producing a consumable steel-based, mineral product utilised in Advanced Gas Cooled Nuclear power stations with a long-term contract to supply the UK nuclear fuel industry.

GadCap is also a market leader in the design and production of bespoke tip clearance sensors through its CapaciSense product line, which are used in the measurement of operational gas-powered turbines during product development to increase energy efficiency and safety.

Funding for the deal has been provided exclusively by London-based Shard Credit Partners.  Alastair Brown, CEO of Shard Credit Partners commented, ‘We are delighted to have been selected as financing partner to back this high quality MBO.  This will be our first investment in the North East region and we look forward to working with the MBO team to help them execute their organic growth strategy for the business over the coming years.’

Andrew Madden and Kerry Gibbons at Gateley plc acted as legal advisers to Shard Credit Partners.  Andrew Cowan at Gateley led the legal due diligence review.

Michael Baker said: “Paul and I are very proud to establish GadCap Technical Solutions Ltd, building on the solid foundations of the previous organisation.  We have created a strong niche in key markets through the creation of innovative engineered-solutions, which we have ambitions to expand in our existing markets and new geographies.”

Paul Seccombe said: “Working with Shard Credit Partners we are confident in our ability to grow the business and maximise on our position at the heart of the North East and its engineering pedigree.  We have a very talented team of engineers and manufacturing personnel, producing advanced and bespoke products, which we aim to expand as we develop the business further.”

The corporate finance adviser to the MBO team was Ryecroft Glenton (“RG”) in Newcastle.  David Nixon, Corporate Finance Manager at RG commented, ‘having led the PGAS division for a number of years, Paul and Michael were ideally-placed to take on the operation from its owners through an MBO.  They have been instrumental in the success of the operation to date and had the autonomy to develop and grow the business, which they have done very successfully’.

 

Shard Credit Partners has now completed three investments from its inaugural fund, with its second and third investments both completing on the same day (February 8th, 2019).  In addition to the MBO of GadCap in Newcastle, Shard Credit Partners also completed and funded the MBO of BW Legal Services Ltd in Leeds on February 8th, 2019.

 

Alastair Brown, CEO of Shard Credit Partners commented, ‘completing two MBOs in one day is a first for us, we very much look forward to completing our next investment in the next several weeks’.  Following these investments, Shard Credit Partners Fund I will be around one-third deployed.

 

Typically, Shard Credit Partners aims to invest as the sole finance provider through senior secured unitranche loan structures, in amounts of between £5-15 million per borrower, with maturities of three to seven years.

 

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