Close Brothers finances inaugural transaction for Birch Faraday Capital
Industry: Healthcare
Product: IDeal with asset based lending and cash flow loan
Our client: Birch Faraday Capital
Established in 2021, Birch Faraday Capital is a search fund with a buy and build strategy designed to grow and create long-term value in the businesses it acquires.
The company was keen to identify a funding partner who could support their inaugural transaction with the purchase of the Mediline Group Services and its subsidiary, Mediline Supported Living. Mediline provides community care and support services for people with disabilities across the northwest of England.
The challenge and solution
To finance the acquisition, Birch Faraday Capital required a lender with experience of providing funding to the care sector and with the agility to structure a tailored solution to meet their specific requirements. Our team of specialists used their industry knowledge of providing funding for major strategic events such as this to develop a bespoke asset based lending (ABL) deal comprising of an invoice discounting facility and a cash flow loan.
ABL is an excellent option for businesses looking to finance strategic or long-term plans, such as a management buy-out/buy-in, merger or acquisition. It can provide higher levels of funding than invoice finance alone by releasing working capital against both stock and property. This can be used as a contingency or to provide additional working capital as and when needed.
The result
Birch Faraday Capital used their facility to unlock the capital needed to acquire Mediline Group Services and Mediline Supported Living as well as to provide the working capital headroom they needed post transaction. The new leadership team created as a result of this complex management buy-in and management buy-out, are now planning the next stage of their growth and using the invoice finance arrangement to support investment in their expert team.
Darnell Irozuru, Managing Director of Birch Faraday Capital said:
“The invoice finance facility was essential to allow the transaction to take place. It gave us financial stability in the first three months of operating, ensuring enough cash flow was available to navigate the transition period of new ownership. The facility is running well, and we know whenever we need to draw upon it, we can.
“The team at Close Brothers was enjoyable and easy to work with, and always available when needed. The deal wouldn’t have happened without them and we’re very grateful for their expertise and support. This was a great way to structure our first acquisition and we would absolutely look to use this form of financing and Close Brothers for our future acquisitions.”
