Grant Thornton - Accessing capital for growth - Funding Solutions

Accessing capital for growth - Funding SolutionsThere are over 50 alternative sources of growth capital that Grant Thornton’s Funding Solutions team can help you access

Raising fi nance can be a real barrier to growth – but for growing medium sized businesses, there are reasons to be optimistic with the entrance into the market of a signifi cant number of alternative sources of debt and equity fi nancing.

Medium sized businesses looking to raise capital to fund growth may currently face a restriction in the availability of fi nance from traditional sources of funding due to the requirement of banks to recapitalise their balance sheets following the credit crunch.

However, the emergence of a signifi cant number of alternative sources of fi nance is fi lling the gap left by banks - alternative sources such as asset based lending (ABL), leasing and consumer fi nance providers, unitranche and mezzanine lenders and equity providers like BGF.

Therefore fi nancing opportunities do exist for businesses seeking growth and can be realised with the right support to help navigate the diverse and complex funding market and deliver the right strategic funding solutions required.

At Grant Thornton we are experienced in helping management teams, corporates and private shareholders of mid-market businesses access capital for both organic and acquisition led growth.

Raising fi nance does not have to be a barrier to growth

Where we can help

• Are you a medium sized business looking to raise between £5-25m of capital to fund growth – whether it be asset backed funding, acquisition fi nance or to fund a change in business operations/strategy to realise growth?

• Do you have a compelling business plan – but your existing bank lender is reluctant to provide funding for growth or only willing to do so at a much higher cost of capital?

• Are you a privately owned/family run business reluctant to seek equity fi nance?

• Are you an FD/CEO who wants to better understand your full range of funding options and what alternative sources of fi nance and funders you can access?

• Do you have under leveraged assets which can be more effectively fi nanced?

How we can help

We support growing, medium sized businesses secure alternative sources of fi nance to fund growth by:

− leveraging our relationships with over 50 funders to identify the best sources of fi nance available

− developing strong fi nancing propositions to increase the chances of securing funding

− negotiating terms to achieve an acceptable cost of capital

− project managing the funding process to ensure a satisfactory conclusion in a timely manner.

What we do Value to client

Leverage our relationships with over 50 funders to gauge appetite to invest

Identify potential sources of fi nance available, from a large pool of funders, that best match your funding requirements

Develop a funding strategy with business plan and fully integrated fi nancial operating and funding model

Produce a robust business plan and model that will stand up to funders’ scrutiny as part of a clear funding strategy

Package fi nancing proposition to potential funding providers

Market the fi nancing proposition accordingly to increase the chances of securing alternative fi nance

Negotiate terms Creating a competitive environment within the funding market - helping to achieve an acceptable cost of capital and associated terms

Project management Managing the overall funding process in order to reach a satisfactory conclusion in a timely manner

Identify potential sources of fi nance available, from a large pool of funders, that best match

Case studies

Client Quattro Group London based provider of plant-hire services to the rail industry.

AssignmentGrant Thornton were engaged to refi nance the existing Hire Purchase (HP) facilities. Prior to engaging with Grant Thornton the business had approximately 30 separate HP providers. Understanding the business and the market in which it operated were crucial fi rst steps in determining the right funding structure for the transaction in a diffi cult market.

SolutionGrant Thornton facilitated the negotiation and structure of the deal, which included a single evergreen plant and machinery facility, an invoice discounting facility and a £6 million mezzanine loan.

OutcomeReducing the number of providers allowed the management team more time to focus on the business. The proposed single plant and machinery facility made more effective use of the asset base and enhanced monthly operating cash fl ow. In addition, control over the entire fl eet gave the eventual lender more comfort that their position would be secure.

ClientSGX Sensortech Provider of sensor and detector devices for environmental, health and safety and materials analysis applications.

AssignmentGrant Thornton were engaged with a management team to execute a management buy-in (MBI), which included raising debt and equity fi nance to fund the acquisition.

SolutionAfter preparing a business plan and fi nancial model, we were able to negotiate terms with Baird Capital Partners for the equity. As the transaction had an MBI element and a lot of the growth was international, we knew the retail banks would struggle to fund the debt, and an alternative funder may be required.

OutcomeLeveraging our relationship with Beechbrook Capital, Grant Thornton were able to negotiate mezzanine fi nance with a small equity strip which allowed the transaction to complete in May 2012.

ClientSwanbridge Hire & Sales Limited (SHS) A specialist provider of high specifi cation industrial scaffolding services primarily to the petrochemical and utilities sectors.

AssignmentGrant Thornton were engaged to advise SHS on raising growth capital in order to support the future expansion of the company. SHS had succeeded in establishing itself as a key supplier in highly regulated environments, but needed investment in order to take advantage of the opportunities available to them.

SolutionGrant Thornton worked closely with SHS to prepare the business for an investor and spoke to a targeted number of potential investors – ultimately helping to secure £5.4 million of funding from BGF.

OutcomeWith the £5.4 million investment SHS plan to grow the business by strengthening their core capabilities, developing a broader range of services and expanding into new sectors and geographies.

National Funding Solutions key contacts

David AscottPartner, LondonT 020 7728 2315E david.p.ascott@uk.gt.com

Ian WilsonPartner, BirminghamT 0121 232 5151E ian.p.wilson@uk.gt.com

Stephen HammellDirector, LeedsT 0113 200 2550E stephen.hammell@uk.gt.com

Mark NaughtonDirector, BristolT 0117 305 7712E mark.c.naughton@uk.gt.com

Tim BloisDirector, CambridgeT 01908 359582E tim.m.blois@uk.gt.com

Andrew StubbsAssociate Director, ManchesterT 0161 953 6923E andrew.stubbs@uk.gt.com

David ForbesManager, LondonT 020 7184 4347E david.forbes@uk.gt.com

Chris BakerManager, ReadingT 0118 983 9609E chris.baker@uk.gt.com

ONE The new funding landscape calls for a new approach

TWO Don’t just rely on traditional funding sources – they may have dried up!

THREE Defi ne your funding requirement carefully – quantum, duration and nature (ie what exactly is being funded – capex, working capital, investment expenditure)

FOUR Consider the optimum match to meet this requirement

FIVE Develop a robust business plan to support your funding requirement

SIX Market the plan to your existing funders – build on existing relationships but explore alternatives

SEVEN Sell the plan to new sources as a debt raising project

EIGHT Prepare for due diligence – anticipate and tackle weak areas in the proposition

NINE Contingency planning is key – we all need a Plan B!

TEN Negotiate the new landscape to secure best terms

• There are many alternative sources of fi nance that Grant Thornton’s Funding Solutions team can guide you to increasing your chances of securing fi nance - we have comprehensive coverage of:− 10 asset based lenders− 7 leasing & consumer fi nance providers− 8 retail banks− 34 alternative funders – including senior, mezzanine

or other debt instruments, and minority equity providers

• We have strong contacts with each of these funders, with a clear understanding of their approach and investment criteria – which means we can help produce a robust and marketable funding strategy and proposition

• We can fi nd the right type of fi nance, the right funder and the right terms in a timeframe meeting your funding objectives and requirements - so your growth plans are not put on hold

• As the leading Corporate Finance adviser to the mid-market completing more deals than anyone else we have unrivalled funding experience in this market

Top 10 tips

Accessing capital for growth

Why Grant Thornton?

Corporate Finance contactsIf you would like to discuss how Grant Thornton can help you achieve your strategic objectives please contact a member of our team or email us at corporatefi nance@uk.gt.com

For more information on Grant Thornton International member fi rms, please visit www.gti.org

© 2012 Grant Thornton UK LLP. All rights reserved. ‘Grant Thornton’ means Grant Thornton UK LLP, a limited liability partnership. Grant Thornton UK LLP is a member firm within Grant Thornton International Ltd(‘Grant Thornton International’). Grant Thornton International and the member firms are not a worldwide partnership. Services are delivered by the member firms independently. This publication has been prepared only as a guide. No responsibility can be accepted by us for loss occasioned to any person acting or refraining from acting as a result of any material in this publication.

grant-thornton.co.ukV22246

BelfastCharlie KerlinT 028 9031 6510E charlie.kerlin@uk.gt.com

BirminghamAlex HydeT 0121 232 5245E alex.s.hyde@uk.gt.com

Ian WilsonT 0121 232 5151E ian.p.wilson@uk.gt.com

BristolMark NaughtonT 0117 305 7712E mark.c.naughton@uk.gt.com

Mark TaylorT 0121 232 5271E mark.a.taylor@uk.gt.com

CambridgeDarren BearT 01223 225673E darren.m.bear@uk.gt.com

Mark ClementT 01223 225604E mark.clement@uk.gt.com

Geoff DaviesT 01223 225630E geoff.davies@uk.gt.com

CardiffChris BurgessT 02920 347565E chris.j.burgess@uk.gt.com

ChelmsfordDarren BearT 01223 225673E darren.m.bear@uk.gt.com

EdinburghNeil McInnesT 0141 223 0618E neil.mcinnes@uk.gt.com

GatwickRupert RawcliffeT 01293 554022E rupert.rawcliffe@uk.gt.com

GlasgowNeil McInnesT 0141 223 0618E neil.mcinnes@uk.gt.com

IpswichDarren BearT 01223 225673E darren.m.bear@uk.gt.com

LeedsStephen HammellT 0113 200 2550E stephen.hammell@uk.gt.com

Ian MarwoodT 0113 200 1513E ian.marwood@uk.gt.com

Will OxleyT 0113 200 1582E will.m.oxley@uk.gt.com

Jonathan SteedT 0113 200 2661E jonathan.m.steed@uk.gt.com

Leicester and NottinghamMustafa AbdulhuseinT 0116 257 5110E mustafa.abdulhusein@uk.gt.com

LiverpoolMark SteelT 0151 224 0833E mark.steel@uk.gt.com

London Colin AaronsonT 020 7728 2942E colin.p.aaronson@uk.gt.com

David AscottT 020 7728 2315E david.p.ascott@uk.gt.com

Stephen BakerT 020 7728 3100E stephen.baker@uk.gt.com

Gerry BeaneyT 020 7728 2589E gerry.d.beaney@uk.gt.com

Philip BirdT 020 7728 2071E philip.bird@uk.gt.com

Anuj ChandeT 020 7728 2133E anuj.j.chande@uk.gt.com

Alan DaleT 020 7865 2777E alan.dale@uk.gt.com

Peter DawsonT 020 7728 3197E peter.dawson@uk.gt.com

Martin GoddardT 020 7728 2770E martin.a.goddard@uk.gt.com

Trefor GriffithT 020 7728 2537E trefor.a.griffith@uk.gt.com

Tim HansellT 020 7865 2793E tim.l.hansell@uk.gt.com

Mo MeraliT 020 7728 2501E mo.merali@uk.gt.com

Andy MorganT 020 7865 2626E andrew.morgan@uk.gt.com

James RobsonT 020 7865 2773E james.robson@uk.gt.com

Philip SecrettT 020 7728 2578E philip.j.secrett@uk.gt.com

Hemal ShahT 020 7728 2635E hemal.shah@uk.gt.com

Michael ThorntonT 020 7728 2644E michael.j.thornton@uk.gt.com

ManchesterAnthony BoothT 0161 953 6307E anthony.booth@uk.gt.com

Will OxleyT 0113 200 1582E will.m.oxley@uk.gt.com

Ali SharifiT 0161 953 6350E ali.sharifi@uk.gt.com

Phil WhaleyT 0161 953 6471E phil.whaley@uk.gt.com

Milton KeynesTim BloisT 01908 359582E tim.m.blois@uk.gt.com

Mark ClementT 01223 225604E mark.clement@uk.gt.com

Mike HughesT 01908 359581E mike.hughes@uk.gt.com

Steve WhiteT 01908 359667E steve.j.white@uk.gt.com

NewcastleSimon McIntoshT 0191 203 7792E simon.a.mcintosh@uk.gt.com

NorwichDarren BearT 01223 225673E dareen.m.bear@uk.gt.com

OxfordWendy HartT 01865 799938E wendy.e.hart@uk.gt.com

ReadingBob AlsopT 0118 983 9637E bob.alsop@uk.gt.com

Paul EtheringtonT 01753 781070E paul.md.etherington@uk.gt.com

Wendy HartT 01865 799938E wendy.e.hart@uk.gt.com

Duncan LambT 0118 983 9612E duncan.lamb@uk.gt.com

SheffieldIan MarwoodT 0114 262 9703E ian.marwood@uk.gt.com

SouthamptonPaul StoutT 02380 381265E paul.stout@uk.gt.com

Grant Thornton also has officesin the following locations:KetteringNorthampton