Background

• BOCM Paul’s is the leading UK manufacturer of animal feed with a national footprint

• Existing facility provided inadequate headroom in light of the significant increase in raw material prices which put pressure on the working capital position

• Close Brothers Corporate Finance engaged to advise the company on the refinancing of existing facilities

• The transaction took place against the backdrop of the credit crunch, with significant reductions in bank lending appetite and a reduction in the number of active ABL lenders in the UK market

Process

• Close Brothers Corporate Finance evaluated a range of funding structures. Asset Based Lending (“ABL”) facilities assessed as being the most appropriate, as it provided a natural source of funding for the company’s financing requirements given their vulnerability in line with raw material prices

• Close Brothers Corporate Finance approached all suitable ABL lenders in the marketplace and managed the coordination and alignment of different lenders’ expectations and requirements to put together a club of banks

• Close Brothers Corporate Finance coordinated the due diligence processes and supported the client in negotiating the commercial details of the transaction, with Lloyds TSB eventually providing the full facilities totalling £77m

Outcome

• BOCM Pauls secured larger 3-year committed facilities to refinance its existing debt structure

• The new ABL facilities provided a capital structure far better suited to the company’s requirements, with attractive pricing and terms compared to prevailing market rates

• Terms and conditions significantly better than lenders’ original proposals

James Powell, Finance Director, said:

“Close Brothers Corporate Finance has provided us with insightful advice, helped us structure a bespoke facility and negotiated skilfully through what has been a difficult period for a refinancing. We are very pleased with the outcome achieved.”

For more information regarding this transaction, please contact Jonathan Trower, Ryan Wood-Collier or Harry Kalmanowicz on +44 (0)20 7655 3100