Product: IDeal™ invoice discounting
Facility size: £1.5 million
This well-established recruitment agency had an excellent performance record and was making a healthy profit. However, having led the business since its inception, three of the five founding directors decided to take a step back and allow the remaining partners to buy them out. The company therefore needed funding to fulfil two objectives:
1. To complete a management buy-out (MBO)
2. To refinance their existing finance facility and provide ongoing funding
The management consulting group being used to facilitate the partner’s succession plan suggested they secured finance through Close Brothers. We quickly arranged an initial meeting and our funding specialists worked closely with the company, and their external associates, to understand both long and short-term goals.
With a full understanding of all stakeholder’s requirements, we proposed using IDeal™ invoice discounting which would release the value of unpaid customer invoices as soon as they were raised. To ensure that all objectives were met, the finance facility was structured to deliver both the initial cash injection needed to support the MBO and ongoing funding.
Thanks to the tailored solution from Close Brothers, the business was able to finalise the purchase in good time. This enabled the withdrawing partners to complete their exit strategy, while the remaining business owners continued to enjoy reliable funding from their invoice finance facility.
The management team were impressed with the supportive attitude and high level of flexibility that Close Brothers delivered throughout the process. The bespoke terms and structure we provided enabled everyone involved in the MBO to realise their ambitions.