£3.75m PE investment in global commodity broker

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Leeds-based YFM Equity Partners (YFM) has made a £3.75m investment in global commodities broker ARRACO Global Markets.

The investment will allow ARRACO to drive the next stage of its growth as it expands its product offering and international footprint.

Founded in 2015, ARRACO has grown quickly expanding into a £4m revenue business and doubling its revenue each year.

The business, which is headquartered in London, currently has a team of over 70 staff and desks covering Power, Gas, LNG, LPG and Renewables servicing clients including oil majors, global trade houses, energy utilities, shippers, banks and funds.

The funds provided by YFM will be used to expand ARRACO’s established UK footprint, hire additional staff and broaden its product offering.

In addition, ARRACO will open two new international offices in Singapore and Houston, which together with offices in London and Tokyo, will give the combined group 24-hour market coverage.

ARRACO co-founder and CEO, Tom Roberts, said: “We are delighted to announce this investment which will allow us to remain independent, continue our rapid growth trajectory and significantly extend our range of product desks.

“I’m particularly excited about establishing two new international offices in Singapore and Houston, from which we will be able to provide global coverage for our clients and improve liquidity in Asia and the US.

“We were looking for supportive investors to work alongside us as we grow the business and YFM have a great track record in the market.

“We’ve generated significant growth over recent years and have had great success with our unique and highly personalised approach to the market.

“It’s an exciting time for ARRACO and I look forward to building on this, as we look to expand the products and service we provide for our clients.”

David Wrench, investment director at YFM, added:  “There’s no doubt ARRACO is a business with huge potential – it has doubled revenue every year and benefits from being led by a dynamic team with real vision to drive forward and differentiate themselves in what has been a fairly stagnant market.

“We felt immediately drawn to their innovative business model with a young, ambitious team of multi-lingual brokers focused on building strong client relationships.

“As we had tangential experience supporting a global aviation broking provider expand internationally, we felt we understood ARRACO’s growth journey and could add real value.”

The YFM team comprised David Wrench, Helen Villiers and Jamie Roberts.

Rachel Turner and Helen Higginbotham of HCR LLP provided legal advice; financial diligence was carried out by Paul Read and Corin Briault-Hutter of HMT LLP; with commercial diligence provided by Geoff Rampton of RP Advisory Ltd.

Anna Cornwallis of Stratton HR provided management and people diligence; Richard Joyce of Grant Thornton provided technical diligence; Jonathan Harrison of Aon looked after insurance diligence; and Philip Hare & Associates provided VCT advice.

For ARRACO, Andrew Woolf and Bethany Silkin of Fox Williams provided legal advice; and Andy Hodgetts and Hamish Rosser of Buzzacotts acted as corporate finance advisers.

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