Endless steps in to secure Vasanta future
TURNAROUND fund Endless has partnered with a syndicate of banks to refinance the Yorkshire-based Vasanta Group, which has turnover of £500m and 1,500 employees.
Sheffield-based Vasanta has received £30m of new investment and had its debt burden significantly reduced from £200m to £50m following the deal which was put together less than three weeks after Leeds-based Endless was approached by Deloitte Corporate Finance which has advised Vasanta.
Endless has injected the majority of the new £30m working capital facilities, and, together with management, will now own 71% of the group, with the remaining 29% being owned by key members of its bank lending syndicate.
Vasanta, which supplies stationery, furniture and computer equipment to retailers and consumers, was formed in 2007 following the merger of Kingfield Heath with computer supplies firms ISA and Supplies.
It ran into financial difficulties caused by a significant withdrawal of credit insurance, its high level of debt and the challenging market.
With annual sales of £523m and profits of £31m, it is run by chief executive Richard Martin, chairman Alan Barclay and finance director Mark Johnston, and was owned by quoted private equity group Electra Partners which wrote off its investment in the company.
Mathew Deering of Endless, who worked on the deal alongside fellow director Chris Clegg, said: “This is an important transaction as it preserves a substantial, established business in the region. Vasanta’s customers and suppliers have an important role to play in the turnaround and we will work with them to ensure the Group is well placed for an improvement in conditions.”
Garry Wilson, managing partner of Endless said: “Endless exists to provide fundamentally good companies requiring financial or operational restructuring with new funds and hands-on support, and we do this quickly. This deal proves that there is equity and bank investment available to UK companies at this time.”
Debbie Jackson corporate partner at Walker Morris, which advised Endless, said: “We realised this was a key transaction for Endless and, as is often the case with good investment opportunities, we had to act swiftly.
“We were able to pull together a multi-disciplinary team involving corporate, restructuring and banking to ensure the deal was delivered successfully and on time. The fact that the deal was completed so quickly is testament to the quality and commitment of all the parties involved.”
Martin Jenkins, partner and head of corporate finance at Deloitte in Leeds said: “This transaction brings to a close a very difficult and uncertain time for Vasanta. Great credit is due to everyone involved for completing such a complex refinancing in record time.”
Richard Martin, chief executive of Vasanta, said: “We have a lot of work to do over the next few days and weeks, as we utilise our improved cash position to increase our stock fill rates and service levels to customers. I am confident that our service levels will soon be back to an industry-leading standard.
“We anticipate that our much-strengthened balance sheet and enhanced financial position will enable our suppliers to obtain trade credit insurance on their supplies to the group in future.
“I would once again like to thank our customers, employees, suppliers and others in our industry, who have continued to provide overwhelming support and loyalty to us, particularly over the last few days. It is now our job to do our utmost to live up to this, and I am confident that we are now well-placed to do so.”
Steve Ellis, a partner of PricewaterhouseCoopers, which advised the banking syndicate, added: “The restructuring provides a solution to a balance sheet that was over-leveraged at the top of the M&A market.”
Endless was advised by Deloitte and Walker Morris. Vasanta was advised by Deloitte and DLA. The banking syndicate, which includes The Royal Bank of Scotland, Bank of Ireland, Allied Irish Bank and Alliance & Leicester, was advised by PricewaterhouseCoopers and Linklaters.
