Customer: River Ridge Recycling
Industry: Waste management
Funding: £3 million asset based lending facility (comprising £2 million invoice discounting line and £1 million cash flow loan) to fund acquisition of a business
About River Ridge Recycling
River Ridge Recycling is a waste management company based in Northern Ireland. The business has seen a great deal of change since it was established over ten years ago, transforming from a landfill firm to a state-of-the-art waste recycling plant. The company continues to invest in technological upgrades in order to reduce the need for its on-site landfill operation.
The firm was looking to acquire another business within the waste sector in Northern Ireland and the acquisition required a blend of debt and equity to finance the transaction. A lack of available cash – due to other working capital commitments at the time – had the potential to hinder completion which led to Finance Director, Eamon Doherty, approaching Close Brothers Commercial Finance. The business required a solution that would generate capital in a short time frame, without the need for additional security, in order to achieve this key acquisition and support a wider growth strategy.
We were selected as River Ridge Recycling’s funding partner due to our ability to make quick decisions and to provide the required level of funding at very short notice. A £3 million asset based lending (ABL) facility – comprising £2 million invoice discounting line, plus £1 million cash flow loan – was structured to assist with quick completion of the acquisition. The ease of the transaction was further supported by increasing the advance of the existing debtor book to 100% as
collateral for the cash flow loan, negating the need for additional security. The loan was provided on a short-term basis for 12 months and, to assist with cash flow, structured bullet repayments of £500,000 at months six and 12 were agreed.
Through completion of the deal, the company was able to consolidate its position within the local waste sector, deriving further benefit from key supply/disposal chains as a result of the acquisition.
Eamon was particularly pleased with the flexibility and speed of turnaround. Speaking about the setup of the facility, Eamon said, “Close Brothers came up with a solution to provide the required funding and had the facility approved and ready to draw within days, allowing a critically strategic acquisition to progress. This facility allowed us to complete an acquisition when faced with a very tight completion deadline and in advance of conventional bank funding being available.”