Case study

Supporting a second Management Buy In with a tailored Structured Finance facility


Having already worked with Ultimate Finance in 2022 to facilitate the Management Buy In (MBI) of another business, this large group once again partnered with the asset-based lending specialist when looking for a funder to assist with the acquisition of a road surfacing and civil engineering contractor key to establishing a presence in a geographical area not yet covered by the group.

The group provides a wide range of services to the Construction sector through various trusted providers based across the UK. Having previously benefited from a £1m Structured Finance facility from Ultimate Finance to facilitate another MBI, it made sense for the group to turn to the lender again this time. Introducer Paul Mak of Pomegranate Commercial Finance explains, “When I introduced the group’s MD to Ultimate Finance last year through my dedicated Regional Director John Davies, the support and funding they received was exactly what they needed to get the deal over the line, so when this acquisition opportunity arose, it was only natural to make John at Ultimate Finance a part of it”.

The group was looking for a funding partner that could facilitate the MBI and also provide ongoing cashflow support after completion of the transaction. John explains, “We have experience in supporting MBIs and MBOs and have found that our approach to Structured Finance has proven to be a great asset for these transactions. We take a holistic view of a client’s range of available assets to unlock as much liquidity as possible against a combination of receivables, hard assets such as plant, machinery or vehicles, and property, which allows us to provide up to £10m in funding. The additional benefit, alongside the required funding, is that it is supported by a full Deal Team whose role it is to get all the pieces of a complex facility together and a single point of contact for the client so that they are kept in the loop and things remain seamless”.

The Ultimate Finance team tailored a funding solution that offered a £2m Construction Finance facility alongside an additional £700k through the refinancing of some hard assets. John continues, “Because we specialise in providing flexible asset-based facilities we have developed an expertise in understanding how to best meet the needs of a business, no matter how unique they are. Here, a sector-specific Construction Finance facility was the best fit as it allows for funds locked in application for payments yet to be made to be accessed immediately to contribute to the MBI, whilst also providing a revolving credit line going forward to support with ongoing liquidity needs. Alongside it, the refinance agreement provides the additional funding the business needs to complete the transaction without the need to source other forms of funding which could have come with hefty deposits or higher interest rates”.

Paul adds, “The business being acquired is a well-established company that has made a great reputation for itself with existing clients and employs around 80 members of staff. As part of the terms of the MBI, all of the employees will be retained, which, in the current economic climate , came as a great relief to all involved. With Ultimate Finance’s funding in place, the group will complete the transaction and is already looking forward to combining the business’ existing customer base to its own to achieve organic growth this year”.

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