M&E specialist completes multimillion-pound MBO refinance
Shard Credit Partners has provided financing of £7m for a debt refinancing and shareholder reorganisation of Midwest Mechanical and Electrical Services, headquartered in Wolverhampton.
Midwest, which has around 120 staff, was founded by Steve Lokucewicz in 1988 as a small electrical contracting business providing maintenance and project services to a selection of local clients within the West Midlands.
In 2002, Steve’s son Paul Lokucewicz joined the organisation and laid the foundations to allow further organic growth by expanding the customer base across construction, defence and the NHS.
The transaction refinances existing lenders and allows the exit of original founder Steve Lokucewicz as he fully retires from the business.
It facilitates increased equity ownership for Paul and the management team that has been creating significant value in recent years following their MBO in 2019, as well as improving the gender diversity of the board.
Paul Lokucewicz said: “The Midwest directors were extremely pleased to welcome Shard Credit Partners on board to assist with the refinancing of our MBO allowing us to bring the wider management team into the board room. This has provided us with a platform to further fuel the growth of the business, the refinancing process was extremely smooth and we found that the Shard Credit Partners team quickly understood our business and its needs.”
Alastair Brown, CEO of Shard Credit Partners, said: “Our recent refinancing of Midwest represents our first transaction in the West Midlands and our tenth investment from Direct Lending Fund I. Having been extremely impressed with Paul and the senior management team during early discussions, we identified an opportunity to put forward an innovative refinancing structure that was ultimately well received and successfully implemented during the summer. We are also pleased to have made an impact from an ESG perspective by facilitating the appointment of Natasha Coates to the board around the time of the transaction. We all look forward to supporting the business and contributing to its stellar growth trajectory in future.”
Greg Easter, Partner at Heligan Group said: “We are delighted to have worked with Midwest and Shard Credit Partners on this deal. Midwest is an owner managed business that has grown very impressively over the last ten years through high quality customer service and investment in people. The financing and support from Shard will enable the business to continue this growth through the incentivisation of key management team members. The approach taken by Shard Credit Partners throughout the process made them excellent to deal with: the team showed flexibility in structuring a deal that worked for all parties and a straightforward approach to negotiating the transaction documents.”
Legal advice to Shard Credit Partners was provided by Gateley Legal, led by banking and finance partner Andrew Madden, supported by Victoria Elliott and William Bowler from Gateley Legal’s Corporate team.
Legal advice to Midwest was provided by Shoosmiths.
Business and transactional tax advice was provided by Ryecroft Glenton’s business tax partner Simon Whiteside and director, Simon Hopwood. Financial due diligence was provided by Ryecroft Glenton’s Grahame Maughan, Jon Routledge and Andrew Cameron.
