Wallingford: Wilson Partners acts in buyout of Factor 21 Group

Wilson Partners Corporate Finance acted for management on the management buyout of the Wallingford-based Factor 21 group of companies, supported by an initial £9 million investment from Mobeus Equity Partners and a new £50m debt facility from RBSIF.

Since its establishment in the Thames Valley more than 15 years ago, Factor 21 has funded over £2 billion of invoices for its clients. Today the firm provides flexible finance and accounts-receivable solutions to more than 400 SME clients with annual sales of between £0.5m and £6m.

Factor 21’s strategy will now be to grow from its two existing regional offices. Mobeus is aligned with management and sees a significant opportunity to capitalise on strong demand from SMEs for finance and service from alternative lenders. It anticipates supporting the investment with further funding to build a nationwide footprint.

Factor 21 is led by experienced industry professionals David Tilling, Neal Errington and Darren Cottenden, all of whom have rolled over significant personal investments to acquire the business alongside Mobeus.  They are supported by a board of highly-experienced non-executive directors. David Robertson joins as chairman. He is a former CEO of Bibby Financial Services which grew from three to 42 offices during his 15-year stewardship.

Adam Wardle, head of corporate finance at Wilson Partners, said: "This certainly was an exciting deal. The combination of the management team, Mobeus and RBS, will make Factor 21 a real force in the factoring and alternative-financing market.  What’s more, the deal enhances Factor 21’s ability and strategy to support funding for growth in the SME market from its core in the Thames Valley and Manchester to a national footprint, a great thing for our economy."

Jonathan Gregory of Mobeus said: “It is always useful to work with an adviser who really understands a sector and Adam and his team were able to bring real insight, personal relationships and corporate-finance expertise to bear in delivering what was a smooth and well-run process.  As well as the acquisition of Factor 21, Wilson Partners had to negotiate and project manage a revised £50m facility from RBSIF which was delivered on time to enable a simultaneous completion.  Having successfully invested in the industry before, we are clear on the important role-factoring businesses play in supporting the smaller end of the UK economy and we are excited to be backing the team’s plan to deliver geographic growth.”

Dave Tilling, CEO of Factor 21, commented: “This is a great day in the life of Factor 21 and we have found the ideal partner in Mobeus to really drive the business forward to be the alternative financier of choice. From the beginning, Adam outlined what the deal would look like at the end, who would end up investing, how we would go about negotiating with all parties to achieve a fair and achievable deal, and deliver the right deal for us as management.”

Professionals involved in the deal were Wilson Partners Corporate Finance as lead adviser, PDT Solicitors as buy-side lawyers Field Seymour Parks as sell-side lawyers, RSM for due diligence, Shoosmiths as lawyers for RBS, Squire Patton Boggs as lawyers for Mobeus, Fairgrove Partners for commercial DD, Alaco for management DD, and Network Ventures for keyman insurance.