Multimillion-pound debt package agreed for removals and storage group

Amin Amiri

Manchester-based a2e Industries has secured a multimillion-pound debt package from Connection Capital to support portfolio company Doree Bonner, one of the UK’s leading relocation and storage businesses.

Connection Capital provides equity and debt packages between £3m and £10m to SMEs across the UK.

Funds are raised from its network of private client investors.

The a2e Industries business was founded in 2001 by Amin Amiri to manage his investments. The group has gone on to acquire controlling stakes in almost 30 mid-market companies and achieved a number of exits.

The debt package will enable Doree Bonner to refinance its existing senior secured debt facilities, and provide working and growth capital as it pursues a value-enhancing acquisition strategy, with several targets already identified.

Connection Capital says the deal highlights that SMEs are increasingly considering private capital as a suitable provider for their loan financing needs, and that demand from private investors and family offices for direct debt investments, which provide regular income, continue to grow.

Connection Capital’s loans can be tailored to fit a company’s specific requirements. For Doree Bonner the facility is structured with a bullet repayment after four years to allow the company to invest cash generated in growth, rather than spending it on capital repayments.

Clients of Connection Capital benefit from financing a high-yielding, low leveraged loan instrument, which will pay a 10% per annum cash coupon at regular intervals, and is secured against a large proportion of the business’ assets.

In addition, Connection Capital will also take a minority equity stake in the business, providing its clients with additional returns potential if the business exceeds its management’s growth forecasts.

Doree Bonner was established more than 25 years ago when two of the UK’s oldest regional removals and storage businesses merged and over the years it has successfully integrated a number of acquisitions.

Based in Dartford, Kent, it now employs 200 staff across 10 warehouse hubs around the country. A member of FIDI, the global alliance of professional international moving and relocation companies, Doree Bonner is now run by managing director Jason Herbert, who joined from Pickfords in 2017, where he was a board member and director of international services.

It serves businesses, including insurers, local authorities and consumers across the UK and internationally, offering office, commercial and domestic relocation for private and council/social housing clients; storage; and corporate disaster recovery services, as well as a range of additional products such as insurance and crate hire.

By offering such a diverse suite of services to a wide range of clients the business is well-placed to mitigate any seasonal or cyclical swings in different areas of its market.

Amin Amiri said: “In spite of the extremely challenging markets brought about by the Brexit uncertainties over the past two-and-a-half years, Doree Bonner has proved resilient and continually profitable.

“The team at Connection focus on the long-term profitability of the company and proposed a flexible approach to establishing a structure that works for all.

“Indeed, partnering with Connection Capital has enabled us to put in place a debt capital structure that is fit for Doree Bonner to allow the company to maximise continued profits from the recent acquisition of a complementary business and focus on capitalising on the existing growth opportunities with its current business streams.”

Doug Wilson, investment director at Connection Capital, said: “More and more SMEs are seeing private capital as an attractive alternative to bank lending.

“Not only are small and mid-sized businesses still struggling to access bank loans more than a decade after the credit crunch, on top of that many find that, if offered, it is on terms that just don’t suit their needs.

“Our flexible model addresses both those issues, assessing opportunities on a case-by-case basis and structuring debt packages in a way that supports business strategy.”

He added: “Doree Bonner is an established, successful, well-managed business with a broad-based service offering, a diversified customer base and good growth prospects, so we are delighted to be able to offer this opportunity to our clients.

“Private investors and family offices are increasingly interested in private debt as a portfolio diversifier. In today’s continuing low interest rate environment, yield is particularly high on the list of priorities.

“Not only does this deal offer a high-yielding, secured loan note, it has the added advantage of an equity ‘kicker’ to further enhance returns potential.”

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