Our Debt Finance team work on all kinds of loans, including more and more sponsor-led private equity deals. These joint effort loans have been a growing part of Director of Debt Finance Stuart Blair’s work, who looked back on the range of businesses he’s helped to support.
At OakNorth, we’ve seen a huge growth in our private equity-backed loans. Many of my colleagues’ work features several joint effort private equity loans, which have been rewarded with nominations for top private equity deal awards. Sponsor-backed loans should not be ignored as an option as they can be an exciting option for lots of expanding businesses. So from cocktail bars to grow-your-own cucumbers, here are some of the private equity loans I have contributed to over the last year.
For experiential businesses like London’s buzziest cocktail bars, it’s all about location location location, which is where debt financing can come in to keep you up-to-date with the latest site opportunities. Quick access to cash can make all the difference in snapping up a desirable location and keeping your business offering fresh and exciting. So working in a partnership that can support you with access to this kind of cash can make all the difference in your company’s growth.
We’ve supported Simmons Bars for several years, starting with our first investment with growth partners Lonsdale Capital in 2018. The growth they achieved independently was only boosted by taking on outside investment, which allowed them to expand with additional sites faster. This is one of the major benefits of working with private equity companies – reaching higher highs than you would have done alone.
An unusual player in the data game, Blis is a self-described ‘audience-first’ data platform that doesn’t rely on personal data to build audiences. It is a planning and buying platform that uses broader anonymised data sets to give a deeper audience overview to big-brand customers like Coca-Cola, L’Oréal and Kraft Heinz. Using Blis helps these companies with targeted ads and campaigns.
We partnered with LDC to fund their investment in the fast-growing data provider. Our loan was used to back the existing management team and enable them to take Blis to the next level. With nearly two decades in the business, this investment from LDC is being used to boost the next stage of its growth plans, aiming to double its existing headcount within the next few years.
This example shows that even after operating for many years independently, choosing to take on private equity funding can open up new possibilities for your business to expand.
Working with private equity companies can be a great way to tackle complex business loan needs. This is how we approached the loan requirements for Rubicon Partners, who are serial investors having backed over 70 companies in their 30 years of operating. We joined forces to provide them with a loan to acquire CMD Limited, a power and workstation solutions provider based in Rotherham.
The manufacturer provides power modules desk setups for offices, with demand expected to increase for their home working solutions as more companies switch to a hybrid working model. Rubicon Partners have previously invested in CMD, and with the existing management team continuing in their roles to see the next stage of growth, it’s a case of more of the same of a winning partnership as they enter a new phase of working together.
Mr Fothergill’s Seeds
A mainstay in garden centres and retail units for nearly 50 years, this established seed company makes growing your flowers and vegetables at home easy. Mr Fothergill’s is a Suffolk-based family-run horticulture business, set up by two business partners in the 1970s and still run by the original Mr Fothergill’s son today. When they looked to secure funding for a management buyout in 2022, we supported Harwood Private Capital with a £20m loan to facilitate the exit of the founding Carey and Fothergill families.
The pandemic saw people spending more time outside and gardening, and Mr Fothergill’s capitalised on the increased demand for seeds and equipment. Harwood Private Capital focuses on taking smaller-scale businesses to the next stage of their growth potential, so it was a case of bringing together a business with a promising future and the right funding partners at the right time. And as poor weather conditions and increased growing costs combine to see the UK facing fresh food shortages, Mr Fothergill’s products are providing a solution, with many people choosing to grow their own vegetables at home to keep their favourite foods on their table.
If you’re a private equity firm looking to partner up to fund a growing business, OakNorth is a bank backing companies across the UK in all kinds of projects. Feel free to contact me directly via email at [email protected] or by checking out our business loans page.
by Stuart Blair, Director of Debt Finance at OakNorth Bank