Helping a steel business transition to new ownership with invoice finance
Industry: Construction
Product: IDeal and GGS top-up
Facility size: £1m
The client
This UK-based steel stockholder and distributor serves customers across the construction, engineering and fabrication sectors, supplying a wide range of steel products to meet different project needs.
Founded in 2001, the business has built its offering around value-added services, with in-house capabilities, including cutting, drilling, folding, profiling and punching. Alongside this, it runs its own delivery fleet and provides complementary products ranging from fittings to industrial power tools.
They have built a strong reputation over many years and are supported by an experienced management team with an in-depth understanding of both the sector and its customer base.
The challenge
The firm was preparing for a management buy-out (MBO), with two long-standing members of the leadership team looking to acquire the company from its original owners, who were planning for retirement.
Having run the business for many years, the incoming owners were well placed to take it forward. However, they needed additional capital to complete the transaction, while also making sure there was enough funding in place to support a smooth transition and maintain day-to-day operations.
As the company is made up of a relatively small team, it was also important that any solution was easy to manage and would not place unnecessary pressure on the finance function or require additional resource.
The solution
Close Brothers provided a £1 million invoice discounting facility through our IDeal platform, supported by a Growth Guarantee Scheme top-up.
Invoice finance helps to unlock cash tied up in unpaid invoices, so they can access funds as soon as invoices are raised rather than waiting for customers to pay. The Growth Guarantee Scheme, a government-backed scheme designed to help UK firms access funding, provided additional headroom.
Together, this tailored solution helped the business complete the MBO while also giving the new owners access to ongoing working capital. That provided valuable headroom from day one and helped ensure trading continued smoothly during the change in ownership.
Ease of use was also a key consideration. Close Brothers’ IDeal platform integrates with most accounting software and automates reconciliation, helping reduce administration and save time for finance teams.
For a smaller team, this was particularly important. The facility gave the incoming owners the support they needed without adding unnecessary complexity, allowing them to focus on running the firm and completing a successful handover.
The result
The management buy-out was completed successfully, enabling ownership of the business to pass to a trusted internal team with minimal disruption.
With funding in place to support both the transaction and ongoing working capital needs, the new owners had the headroom to manage a smooth transition and focus on the next stage of the company’s journey.
