Clearwater International has advised Greater London Enterprise Group (GLE) on the management buyout of its subsidiary, IGF Invoice Finance Limited (IGF), to a group of experienced commercial lending professionals, backed by Spring Ventures.
IGF is a leading, independent commercial finance provider for SMEs nationwide. IGF helps UK SMEs, with revenues up to €124m, meet their growth aspirations and working capital needs. The facilities provided are also used to support re-financings, mergers & acquisitions and management buyouts & buyins.
GLE is one of the most active supporters of small businesses, focused on supporting SMEs with the expertise and resources to compete. The decision to sell reflects GLE’s strategy of pursuing structural changes that will improve its effectiveness and free up resources to invest in future growth.
Spring Ventures is an independent private equity firm which invests in management buyouts of UK companies with high growth potential, focusing within the business services, industrial products, IT, financial services and healthcare sectors. The firm will initially invest €11m to fund the MBO and provide growth capital, then commit a further €14m of follow-on capital over the next three years, and at this time will also take a majority stake.
Clearwater International advised GLE on the management buyout, led by partner James Barraclough.
Chris Manson, CEO of GLE Group, commented: “The decision to sell our interest in IGF is good news for all involved: Spring Ventures has the management expertise that IGF will need to expand into new markets, whilst GLE sets its sights on a new and wider range of business services. We are currently in a very strong position in terms of profitability and financial resources, and are fortunate to have a Board with a great deal of ambition. The sale of IGF will enable us to broaden our remit considerably and focus on developing new revenue streams in a range of areas. The benefits for everyone involved in this transaction are clear, and will directly support the business goals of all concerned.”
Matthew Cooper, new Chairman at IGF, commented: “Against a backdrop of continued demand for SME funding, this is a very exciting opportunity to take a relatively small invoice lending platform and grow it into an asset based lending business of significant scale. Aside from bank lending, there are still very limited credit facilities available for smaller businesses. Our model provides a solid way to deliver flexible forms of funding to SMEs and I have every confidence that we will increase the size of our loan book.”
John Hudson, Managing Partner at Spring Ventures, said: “This deal gives us an attractive opportunity to back what we believe is the strongest team in the asset based lending sector. Due to the complexity of the business, few operators have the credibility to provide a full range of asset based loans at this end of the market. The IGF team has proven experience of building successful lending businesses and we very much look forward to working with them to create a major new provider of asset based lending to SMEs.”
James Barraclough, International Head of Financial Services at Clearwater International, added: “Greater London Enterprise have been nurturing IGF for several years and it’s great to see that they’ve found an exceptional team to take over the business. We wish them every success going forward.”