Clearwater advises on £30 million re-capitalisation package for LS Group


Birmingham’s Clearwater Corporate Finance has advised on a £30 million re-capitalistion package – its largest transaction since going through its own management buy-out six weeks ago.

L S Group and its subsidiary, Leaderflush & Shapland Ltd, the UK market leader in the manufacture of commercial doors and doorsets has announced the £30 million re-capitalistion package, which is enabling some of the existing management together with venture capitalist Graphite Capital, to extract a proportion of their equity value in cash as well as re-investing in the business as it moves forward with its expansion plans.

The deal, funded by Fortis Bank Acquisition Finance in the Midlands, will enable the group to concentrate on its strategy of dominating its chosen markets, through investment in IT and selective acquisitions in the UK and Europe.

CLEARWATER’S Corporate Finance team in Birmingham originated, structured and led the re-capitalisation opportunity and were also responsible for raising the funding and were led by partner Jon Hustler, assisted by director Rob Britton.

Hustler said: “This is a great deal to have led out of our Birmingham office and is a real win, win situation with the existing investors extracting cash value and retaining enhanced equity stakes going forward. The re-capitalisation will enable the group to further realise its ambitions in its marketplace.”

With a £37 million plus turnover, the group employs over 500 staff and operates from two large manufacturing sites in Langley Mill, near Nottingham and Barnstaple in Devon with a smaller operation based in Sheffield. L S Group was a Management Buy-Out from Whitecroft plc in August 1999.

A major new IT system will provide the group with an unrivalled fully integrated straight-through electronic process from design to delivery. It is also looking to further develop partnerships with key major national contractors.

L S Group is five times larger than its nearest competitor and has an overall market share of 11 per cent. It sells into two broad market categories of private & public construction, which includes commercial, health, education, leisure, industrial and social/private housing. It has partnership schemes with a cluster of major national contractors.

Roy Wakeman, chief executive of L S Group said the deal provided the group with excellent opportunities. “The LS brand is synonymous with quality, choice, reliability and expertise and we are ideally positioned to benefit from planned government investment in education and health as well as significant growth in PFI contracts.”

Ian Howey, head of acquisition finance and Sue Varley, senior manager led the deal for Fortis while Graphite Capital’s team included partner Andy Gray and Markus Golser, investment director.

Howey commented: “In the present climate we are seeing an increasing number of opportunities to re-gear profitable business, to provide funding both to support growth and generate a level of return for the investors.”

DLA Birmingham advised the management led by partner John Campion. Partner Pat Johnstone and solicitor Ran Oren from Eversheds LLP in Nottingham advised Fortis Bank with Olswang, London advising Graphite and the newco, led by partner Fabrizio Carpanini and solicitor Cathy Taylor.