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Growth Intelligence secures £1.5m of venture debt funding from Shard Credit Partners

Growth Intelligence has secured £1.5m of funding from Shard Credit Partners through its UK technology-focused venture debt fund. This marks the third investment made by Shard Credit Partners’ new fund, and the first since its successful first close which was announced in June 2022.

Growth Intelligence helps B2B marketers, who have struggled to accurately and completely define their audiences, run more efficient and creative digital-first campaigns. With the world’s richest data on SMEs, Growth Intelligence allows marketers at blue-chip, global clients including American Express and Vodafone, to run ABM at scale for the first time.

The Company has won numerous awards and has received backing from Innovate UK, the UK’s innovation agency.  Growth Intelligence has been experiencing rapid growth over recent years and generated a 100% year-on-year revenue increase for 2021-2022.  The funds raised will be used to support sales team expansion, product development and expansion into new markets planned for the coming year.

The investment is in line with Shard Credit Partners’ strategy to target borrowers with annual recurring revenues of at least £2.0 million, operating in the B2B SaaS and fintech sectors and benefiting from long term customer contracts.  Its focus is to provide flexible venture loan capital in support of sales growth, through increased expenditure on marketing initiatives. Previous investments include PassFort, which generated a total gross IRR of 249.2% in just six months (1.8x multiple on invested capital) and Rezatec.

Venture debt is becoming increasingly popular with high growth technology companies globally in recent years.  The asset class is highly developed in the United States, having positively tracked the strong growth in the venture equity market during the last two decades.  The venture lending market is in its infancy in the UK and remains an area that is materially underserved, which has created an opportunity for innovative private credit managers to raise dedicated technology venture debt funds.

Market demand for venture debt in the UK is being driven on the back of very strong growth in the technology venture capital sector over the past decade, which now comprises approximately 13,000 post series A technology companies.  This represents a significant addressable market opportunity for specialist UK technology venture debt funds, such as the one launched by Shard Credit Partners Limited.

William Chappel, Head of Venture Debt for Shard Credit Partners Limited, said, “We are very excited to provide financing support to Growth Intelligence. We’ve been looking to work with this business for some time now and we’re delighted to complete this investment. Growth Intelligence has an enormously exciting offering, and we can’t wait to work closer with Tom, James and the wider team as the business continues to grow. This is a great addition to the Shard Credit Partners UK Tech focused Venture Debt fund.”

Tom Gatten, CEO of Growth Intelligence commented, “Growth Intelligence’s goal is to cement its position as the only platform offering account based marketing at scale — across the U.S. and the U.K. The opportunity for businesses to acquire new customers digitally is growing post-covid, yet most marketing leaders struggle to confidently define their ICP and total addressable market, which leads to high digital ad spending, slow growth, and low conversions. We’re here to solve this problem and transform B2B marketing by enabling large enterprises and mid-sized companies to build, scale and launch account-based marketing programs at scale. This latest round of funding will help support Growth Intelligence to invest in our own commercial team and become a global account based marketing champion and are pleased to have received this venture debt from Shard Credit Partners.”

Alastair Brown, Chief Executive of Shard Credit Partners, commented, “Our investment in Growth Intelligence marks the third investment from our new venture debt strategy.  The investment team, led by Will Chappel, has a strong pipeline of opportunities and we expect the pace of deployment to continue through the summer months, supporting positive fundraising momentum as we approach subsequent fund closes through the remainder of 2022.”

Shard Credit Partners Limited is currently in advanced discussions with several UK and international institutional investors with regard to participating in subsequent fund closes throughout summer 2022.  The target fund size at final close is £75 million, with a hard cap at £100 million, by June 2023.

Shard Credit Partners Limited has a strong focus on ESG across all its private credit investments and has historically been a strong supporter of female entrepreneurs and firms with meaningful female leadership, ownership, and senior management.  No less than 80% of its investee companies have female board representation and 60% have mixed sex equity ownership, a direct result of Shard Credit Partners Limited’s implementation of ESG covenants and ESG margin ratchets in its loan agreements and investment documentation as standard.

Legal advice to Shard Credit Partners was provided by Orrick LLP, led by Partner Scott Morrison and supported by Hridi Chowdhury.

 

 


About Shard Credit Partners Limited:     
Shard Credit Partners Limited is an alternative investment fund manager focused on private credit strategies in the UK lower mid-market.  Its funds seek to generate superior risk-adjusted returns from conservatively structured senior secured credit investments with equity upside. Fund strategies include SME direct lending and tech-focused venture debt.

Shard Credit Partners Limited is currently investing from its debut direct lending fund Shard Credit Partners Fund I, which held a first close in October 2017 at £90.2 million.  Shard Credit Partners Limited plans to hold a first close on its second UK lower mid-market direct lending fund during Q4 2022.

Shard Credit Partners Limited invests in solid small to medium sized businesses with strong management teams, supporting them by providing transformative growth capital and event driven financing in support of innovation, growth, and expansion. The funds invest in businesses throughout the UK.

Recent investments include the venture debt financing for Rezatec Limited in August 2021, the refinancing and shareholder reorganisation of Midwest Mechanical and Electrical Services Ltd in August 2021, as well as the financing in support of the acquisition of The Technology Group by Gradwell Communications in March 2021. The SME direct lending fund also funded the MBI of JST Services Ltd in Scotland, the MBO and buy-and-build strategy of eQuality Solutions Ltd in the North-East of England, and the MBO of Chameleon Technology (UK) Ltd in Harrogate, North Yorkshire, each of which completed in December 2020.

In 2020, Shard Credit Partners Limited ranked eighth in the Debtwire UK Direct Lender league table published by Acuris. Shard Credit Partners Limited was recently awarded Alternative Finance Provider of the Year 2021 (North-East region) at the Insider Media Dealmakers Awards.

Shard Credit Partners Limited is an Appointed Representative of Shard Capital AIFM LLP, authorised and regulated by the FCA (number 615463).

 


Contact details:

Newgate Communications

 

Elisabeth Cowell / Robin Tozer / Isabelle Smurfit

Email: shardcapital@newgatecomms.com

 

Shard Credit Partners Limited

 

Head of Business Development: ben.ellis@shardcreditpartners.com

Investor relations:   IR@shardcreditpartners.com

Business:    info@shardcreditpartners.com

Website:    www.shardcreditpartners.com

Alastair Brown interviews Richard Jennings, Managing Director of JST Services (Scotland) Ltd

In December 2020, Shard Credit Partners announced it had provided acquisition financing of £12.0 million in support of a management buy-in (“MBI”) acquisition of JST Services, led by new MD and port sector veteran, Richard Jennings.

Fast forward to September 2021 and Shard Credit Partners’ CEO, Alastair Brown, catches up with Richard Jennings, Managing Director at JST Services (Scotland) Ltd.

Below, Alastair interviews Richard on how JST Services (Scotland) Ltd has been operating since the acquisition, what achievements have been made, as well as what the future outlook looks like.

Shard Credit Partners win “Alternative Finance Provider of the Year” award.

Shard Credit Partners have won the “Alternative Finance Provider of the Year” award at the 2021 North East Dealmakers Awards hosted by Insider Media in Newcastle last Thursday evening (26th September 2021).

Insider Media:

“The team completed four deals with a total committed financing of £34m underwritten during the qualifying period. Highlights include funding in support of the acquisition of Bailey Group by SKS Business Services and the MBO of eQuality Solutions and add-on acquisition of Amano Technologies. The judges were impressed with the commitment that Shard Credit Partners had made to the North East and the businesses it has supported here.”

To read more on the 2021 North East Dealmakers Awards ceremony, please click here.

Shard Credit Partners backs SKS Business Services with £10 million to fund acquisitions with a focus in North-east.

26 August 2020 – SKS Business Services Limited (“SKS”), the award-winning firm of chartered accountants, has been backed by Shard Credit Partners with an additional £10 million commitment to fund a range of strategic acquisitions in the North East of England and elsewhere. Heads of terms have been signed on the first deal, which is expected to be completed in September 2020.

In total, Shard Credit Partners has committed £20 million to support SKS’s acquisition-led growth as it aims to become a top 20 UK accounting firm.  Using finance arranged by Shard Credit Partners, SKS has completed ten acquisitions since May 2018. These acquisitions include the recent acquisition of Thompson Jones in Bury, just north of Manchester, in September 2019.  This expansion into the North West marks the first of what is expected to be a series of acquisitions in the North West and North East as SKS continues its nationwide expansion plans into new geographic areas.

SKS provides accounting, bookkeeping, tax, payroll and outsourced finance function services to SMEs across the UK and has a growing insolvency business.  SKS is one of the UK’s leading SME-focused accounting services firms, with client numbers growing to circa 8,500, up from 3,500 in 2018. The new acquisition will cement this position, giving SKS a new foothold in the North East. SKS already has a presence in four out of the eight UK regions, including the East of England, the South East of England, London and the North West of England.

SKS’ buy and build strategy has delivered strong revenue growth from £4.7 million in June 2018, to over £12.0 million as at 30 June 2020. EBITDA has increased from £1.2 million to £3.2 million in the same period, consistently achieving an EBITDA margin of around 27%.

SKS has a strong pipeline of additional acquisitions across the UK expected to complete during the remainder of 2020 and into 2021, with the continued support of Shard Credit Partners. Providing this funding fits with Shard Credit Partners’ strategy to become a leading provider of capital to companies focused on achieving growth in the North of England. In the past 18 months, Shard Credit Partners has deployed investment commitments totalling £46.8 million in this region.

Shard Credit Partners CEO, Alastair Brown, said: “As it builds upon its highly successful acquisition-led growth strategy, we are excited to be supporting the next phase of SKS’s expansion as it moves into the North East. The region is an area of focus for Shard Credit Partners.  In the past 18 months we have completed four management buyouts in Newcastle, Leeds, Durham and Liverpool. We have deployed investment commitments totalling £46.8 million in the North East and North West regions. Despite the economic conditions, we see lots of investment opportunities in the area in the coming months.”

Sanjay Swarup, Managing Director of SKS, said: “Shard Credit Partners’ financing has been instrumental in our acquisition strategy.  We are developing a reputation of helping accountancy and insolvency firms merge with us seamlessly with minimum client attrition.  Our modern working practices have allowed us to deliver high-quality services, on time and without disruption, to our clients during the pandemic.  We are proud of the fact that both the increase in Shard Credit Partners’ commitment by £10 million and talks with potential firms wanting to merge with SKS happened during the height of lockdown. This interest reflects the momentum that SKS has developed over the last several years.”

 

Contact details:

Newgate Communications

 

Tel: Elisabeth Cowell/ Robin Tozer/ Isabelle Smurfit

Email: shardcapital@newgatecomms.com

Shard Credit Partners Investor relations:   IR@shardcreditpartners.com

Business:    info@shardcreditpartners.com

Website:    www.shardcreditpartners.com

 

About Shard Credit Partners

Shard Credit Partners is an investment manager focused on private credit strategies in the UK lower mid-market.  Its funds seek to generate superior risk-adjusted returns from conservatively structured senior secured credit investments at low leverage, benefiting from robust documentation and full covenants.  Shard Credit Partners is currently investing from its debut direct lending fund Shard Credit Partners Fund I, which held a first close in October 2017 at £90 million.  Shard Credit Partners will commence fundraising for its second UK lower mid-market direct lending fund during the fourth quarter of 2020.

Shard Credit Partners invests in solid small to medium sized businesses with strong management teams, supporting them by providing transformative growth capital and event driven financing in support of innovation, growth and expansion.  The fund invests in businesses across all sectors and throughout the UK.  The firm has a strong ESG focus; in particular, it is a strong supporter of female entrepreneurs and firms with meaningful female leadership and senior management.

Recent investments include the innovative double MBO of BW Legal and PRAC Financial in Leeds, which was named by Insider Media as their Deal of the Month for February 2019.  In the same month the fund also backed the primary MBO of GadCap Technical Solutions Ltd in Newcastle.  In September 2019, Shard Credit Partners completed the MBO of Alexander Technologies Europe Limited in Peterlee, County Durham.  In March 2020, Shard Credit Partners backed the MBO of Jackson Lees Group in Merseyside by its senior management team.  The fund is currently working on a number of live mandates around the UK for completion in the fourth quarter of 2020.

£12.0 million senior secured unitranche loan facility in support of the MBO of award-winning law firm

Shard Credit Partners announces the signing and completion of a £12.0 million senior secured unitranche loan facility in support of the management buy-out by MAPD Ventures of award-winning North West law firm Jackson Lees Group Ltd and to finance a nationwide buy-and-build acquisition strategy.  The MBO of JLG, which completed on 11th March 2020, was led by its incumbent senior management team comprising CEO Brian Cullen and COO Joanna Kingston-Davies.  As part of its buy-and-build strategy, JLG will progress with its near-term acquisition pipeline of three legal services businesses, primarily based in the North West of England.

MAPD (Making a Positive Difference) is the single core value of the Jackson Lees Group and Cullen and Kingston-Davies felt it only natural that they would incorporate this ethos and vision into the name of the new parent company.  This ethos gels well with Shard Credit Partners’ stated objective to encourage and promote diversity in the ownership and board structures of its investee companies, including supporting female entrepreneurs.

JLG was formed in 2017 following the 2016 acquisition of Lees by Jackson Canter.  It is comprised of two divisions, Jackson Lees and Broudie Jackson Canter.  JLG is a leading legal services firm in the North West of England, providing individuals and commercial clients with high-quality services across clinical negligence, residential property, court of protection, wills, trust and probate and a range of other sectors.  JLG is renowned for its work in supporting families at the Hillsborough Inquest and Birmingham Pub Bombing Inquest and is currently working with families on the Manchester Arena Bombing Inquiry.

JLG is highly focused on environmental, social and governance (ESG) matters, which Shard Credit Partners is proud to support.  The Company is proud to offer services that make a positive difference to society and has a national reputation for its Access to Justice work which ensures the most vulnerable have access to appropriate legal advice.  Furthermore, JLG established the Jackson Lees Foundation in 2015 with the aim of supporting disadvantaged groups within the community, under four pillars: justice, social, education and medical care.  JLG has received recognition via multiple award wins including the ‘’Work in the Community’’ award at the Liverpool Law Society Awards 2017.

Brian Cullen, CEO of JLG, said: “the MBO begins an exciting new chapter in the growth of our business and now allows us to accelerate finding great businesses to join the Group.  The relationship with Shard is founded on a mutual view of what a ‘Great’ business should look like, with a strong view of cultural alignment, putting people at the forefront of what we do both internally and externally, and we are delighted to have their backing.”

Joanna Kingston-Davies, COO of JLG, noted: “our strategy is predicated upon taking away the headache of “back office” for law firm owners to free up their time to focus on localised growth and development.  By providing strong operating platforms and infrastructure with defined career structures and leadership, we will enable traditional law firms to deal with succession issues and to focus on what they do best.”

Alastair Brown, CEO of Shard Credit Partners, commented: “we are delighted to have been able to support Brian and Joanna in this MBO transaction.  This represents the first investment from our current fund in the North-West UK region, which will form the nucleus of an ambitious buy-and-build acquisition strategy to create a more significant legal services group nationwide.”

Financial Due Diligence was provided by Ros Jones and Rebecca Smith from Dow Schofield Watts Transaction Services.

The Vendors and senior management team leading the MBO were advised by James Curtis from Dow Schofield Watts Corporate Finance, Brian McCann of Shareholder Strategies and O’Connors Legal Services Limited.

Legal advice to Shard Credit Partners was provided by Gateley led by Partners Andrew Madden and Andrew Cowan, supported by Alison Davidson-Cox, Christian Wiltshire and Matthew Smith.

This transaction marks Shard Credit Partners’ fourth consecutive MBO financing in the North of England in the last 13 months and the third consecutive MBO financing which includes a female entrepreneur in the incumbent senior management buy-out team.  In 2019, the Fund supported the £13.5 million MBO of Leeds-based BW Legal by its co-founder Rachael Withers, the £5.7 million MBO of GadCap Technical Solutions in Tyne & Wear by its senior management team and the £9.2 million MBO of Durham-based Alexander Technologies Europe Limited by its incumbent senior management team.

ENDS

Funding of four more acquisitions by SKS Business Services under £10 million loan facility

Shard Credit Partners announces the acquisition of a further four chartered accountancy practices by SKS Business Services Ltd (“SKS”or“the Company”).  The acquisitions were funded under a £10 million senior secured unitranche facility, which was committed by Shard Credit Partners Fund I (“the Fund”) in May 2018.  SKS is an award-winning firm of chartered accountants providing accounting, bookkeeping, tax, payroll and outsourced finance function services to more than eight thousand SME customers located throughout the UK.  SKS also has an established and growing insolvency business. 

Since the date of the initial financing in May 2018, SKS has been able to rapidly accelerate its acquisition growth strategy, as it seeks to become a top twenty UK accounting firm and grow nationwide.  Recent acquisitions have significantly expanded the geographic footprint of SKS, which now has a presence across four out of eight of the UK regions, including the East of England, the South East of England, London and the North West of England.

Under its successful buy-and-build strategy, SKS has completed ten acquisitions in total since May 2018, using finance arranged by Shard Credit Partners.  This brings the total number of acquisitions completed by SKS to 18 since November 2013. 

SKS has continued to build its impressive financial track record, achieving strong growth in LTM revenues from £4.7 million in June 2018, to over £11.9 million currently.  LTM EBITDA has grown from £1.2 million to £3.3 million pro forma for the four recent acquisitions.

SKS operates a vertically integrated offshore operating model with 100 staff in the UK and 250 professional support staff located across seven offices in North-West India.  SKS provides its customers with high quality accountancy, tax, business advisory and insolvency services at competitive prices. 

SKS’s four recent acquisitions of Westlake Clark, Baker Watkins, Thompson Jones and Cansdales were completed during summer 2019.  Westlake Clark has offices in Southampton, Lymington and New Milton, which are new geographic markets for SKS.  Westlake Clark provides accounting, bookkeeping and tax services to more than one and a half thousand clients based predominantly in and around the South of England.  Baker Watkins is a firm of chartered accountants based in Stevenage, Hertfordshire.  This acquisition provides a strong, stable portfolio of businesses that adds over two hundred and eighty mainly small business clients.  Thompson Jones is an accounting practice based in Bury, enabling SKS to further expand geographically by acquiring a highly performing, diversified practice.  Cansdales, based in Buckinghamshire, provides a broad range of services to businesses, individuals and not for profit organisations.  

These acquisitions will enable the previous owners to successfully exit their businesses over a period of time, whilst realising the value of their enterprise and ensuring that their valued customers will continue to benefit from high quality professional accounting services under the umbrella of a larger group that is expanding in line with its strong nationwide growth ambitions.

Shard Credit Partners CEO, Alastair Brown, said, “SKS’s remarkable growth story over the past eighteen months is a testament to our strategy of providing transformative growth capital to SMEs in the UK lower mid-market to unlock rates of growth not otherwise achievable with other forms of financing.  Our loan commitment has enabled SKS to almost triple its EBITDA through acquisition in eighteen months, whilst maintaining very moderate net financial leverage at under 4.0x. SKS’s unique proposition of securing acquisitions at attractive EBITDA multiples in combination with post-completion restructuring and offshoring of accounting work to India is highly EBITDA accretive”.

Sanjay Swarup, Managing Director of SKS, said “SKS’s acquisition-led growth strategy is now proven and continues to drive interest from accounting business owners looking for an exit through a sale.  We have a strong pipeline of acquisition candidates throughout the UK and expect to compete several more transactions in the coming months”.

Shard Credit Partners is a UK lower mid-market-focused direct lending fund established to provide flexible long-term growth capital to UK SMEs.  Since completing the initial SKS financing in May 2018, Shard Credit Partners has completed three MBOs in the North-East of England during 2019.  Shard Credit Partners Fund I has facilitated the completion of thirteen individual company acquisitions to date throughout the UK, from a combined total of £38 million of financing commitments. 

ENDS

Alastair Brown interviewed at the Debtwire European Mid-Market Forum

Alastair Brown, CEO of Shard Credit Partners recently spoke with fellow panellists at the Debtwire European Mid-Market Forum. Afterwards, he found some time to sit down with Debtwire to discuss growth, opportunities, risk and competition in the lower mid-market. Watch his overview here 

Commitment of £10m senior secured unitranche facility to SKS Business Services

Shard Credit Partners announces the signing and completion of a £10 million senior secured unitranche facility to SKS Business Services (“SKS” or the “Company”). The investment has been made from Shard Credit Partners Fund I, a UK lower mid-market focused direct lending fund.

The unitranche facility, which includes a £10 million accordion feature, will enable SKS to execute its near-term acquisition pipeline. The Company is pursuing a buy-and-build strategy and has acquired eight businesses in the chartered accounting and business services arena in the past five years. SKS aims to become a top-twenty accounting firm in the UK within the next five years.

SKS is an award-winning firm of chartered accountants providing accounting, bookkeeping, tax, payroll and other outsourced professional services to more than three thousand UK SME customers. The firm has 40 customer facing staff operating from offices located across the South-East including London, Reading, Farnham, Croydon and Tunbridge Wells.

SKS is unusual in that it operates an innovative, vertically integrated offshore operating model with 145 professional support staff located across four offices in North-West India. This enables SKS to provide its customers with high quality outsourced services at competitive prices.

SKS can offer a strong proposition for running the outsourced finance function for its SME customers, putting them on a more equal footing with larger corporates, which have outsourced such functions for more than a decade. This includes providing everything from day-to-day bookkeeping, running payroll, monthly and quarterly reporting and tax planning to working with management to develop business plans through detailed financial modelling.

SKS is entrepreneur-owned and was established in 2007 by Sanjay Swarup, a chartered accountant with a background in natural resources.

Sanjay Swarup, Managing Director of SKS said, ‘’SKS has a significant number of attractive opportunities to grow the business and increase its market presence nationwide. Shard Credit Partners is an ideal partner to assist with this growth. The funding is structured in such a way that Shard Credit Partners Fund I directly benefits from the growth in the value of the Company.

So far, SKS has over recent years focussed on acquisition growth in London and the South-East. With committed long-term growth capital funding now in place, we are well placed to scale up nationally. We would like to hear from accounting practice owners who are looking to exit or part-exit their practice and ensure a positive legacy is retained.”

Alastair Brown, Chief Executive of Shard Credit Partners commented, “We are delighted to be supporting SKS in the next important phase of its transformational acquisition growth strategy. Sanjay and his team have developed a highly effective acquisition model, whereby target identification, structuring and integration have been streamlined to ensure a fast-track process and achieve meaningful financial synergies. SKS’s India-based professional support infrastructure is easily scalable and can deal with the absorption of several acquisitions simultaneously.

Furthermore, SKS exhibits strong environmental, social and governance (ESG) credentials, which we are proud to support. Across the business, 58% of its staff including senior management are women, which is the result of a deliberate strategy of diversity and equality in the workplace. ESG is increasingly important to our institutional investors”.