£1.4m invoice finance facility enables CM Marketing to complete an MBO

Bathroom

Our customer

Based in Northern Ireland, CM Marketing is a long-established, profitable business specialising in the wholesale distribution of bathroom and plumbing products.

The company supplies builders merchants and showrooms across Ireland. They pride themselves on delivering a fast, efficient service and have an excellent reputation in their sector.

Business challenge

The existing owners had achieved significant success with CM Marketing over a 30-year period and decided it was time to exit the business. They hoped to finalise a purchase with senior members of the existing management team, Neville Robinson and Rob Prince, who were trusted to continue running the firm profitably and to a high-standard.

The SME therefore sought funding to meet two requirements:

  1. To provide the upfront liquidity needed to complete a management buyout (“MBO”)
  2. To increase cash flow to facilitate trading and support an ongoing product range expansion

Initially, the senior team found it challenging to find a finance solution that would provide both an immediate cash injection and the ongoing working capital needed. However, after seeking support from Hannaway Chartered Accountants, the business was introduced to Close Brothers who suggested invoice discounting could be a good fit.

The solution

Following in-depth conversations with HannawayCA and CM Marketing, Close Brothers produced a structured and sustainable finance deal to support the company. This combined an IDealTM invoice discounting facility with a cash flow loan, providing in excess of £1.4m in total.

With the new facility in place, the buyers were able to use cash tied up in unpaid customers invoices to cover the initial acquisition costs. This meant that the deal was completed in a quick and straight-forward manner.

On an ongoing basis, the structure of the facility provides flexibility and enables strategic decisions to be made regarding the drawing down of available funds. The SME’s trading has benefited from the knowledge that additional working capital is available if needed.

The results

Neville Robinson, Director at CM Marketing, said:

“Using invoice discounting enabled us to complete the MBO quickly, and the facility was structured to support us over the long term. The additional liquidity is proving very useful.

“Close Brothers were recommended, and I can’t speak highly enough of the support they offer. From the word go, they worked closely with our team to secure the funding we needed and have continued to be on the ball, looking after our account and providing advice where possible.

“As a specialist business bank, they understand our pressure points and aims – it’s a personal service and there’s a very flexible, problem-solving attitude.”

To find out how we can help, call today on: 01 871 1060