Manufacturer secures £700,000 loan to complete MBO

Doncaster-based manufacturer Intastop has secured a £700,000 eight year, fully unsecured loan to complete a management buy-out and invest in its UK manufacturing facilities to grow the business.

The firm was founded in 1992 by founder and shareholder John Hills. It designs and manufactures specialist internal building protection products for doors, walls and people, primarily in the health and mental health sectors. The business employs 34 people and turns over £4.3m a year.  It expects to employ a further five people in the next financial year.

The existing management team, which has been running the business for five years, will use the funds to complete the purchase of the company from John Hills.  They will also invest in the machines and people they need to manufacture more of Intastop’s products in the UK.

Steve Woodhead, managing director of Intastop, said: “Since starting in 1992, Intastop has been going from strength to strength.  This loan enables us invest in our UK manufacturing capabilities and take the business to the next phase of growth.”

Caple, the alternative SME credit specialist, provided the funding. The lender said that SMEs such as Intastop typically had difficulty raising money without assets to put up as security to banks, making personal guarantees or diluting their ownership by issuing equity.

Dominic Buch, co-founder and managing partner of Caple, said: “Options for unsecured debt are limited in the UK.  While banks can fund an amount that reflects the tangible assets in a business, they can’t help if a business has no further assets.

“Intastop had this very issue.  In an asset-light economy such as the UK, this creates a barrier to growth and may push businesses to issue equity instead of raising debt.  Our deal demonstrates how we are able to support ambitious SMEs with long term flexible finance for succession and growth.”

Karl Hodson, director – corporate solutions, BTG Advisory, who advised on the deal, said: “Caple was the perfect funding solution for the transaction, allowing the team to purchase the business and continue the growth strategy.  The real advantage of Caple is that it complements secured lenders, providing a much more suitable funding package.”

The loans Caple facilitates are part of BNP Paribas Asset Management’s SME Alternative Financing direct lending platform, which enables SMEs to access funding from institutional investors.  BNP Paribas Asset Management aims to provide €1bn per year in funding to SMEs across Europe and €400m in the UK.

Caple has completed four deals worth £9.95m in total for four UK SMEs. This loan complements existing secured lending from Barclays Bank.