Arbuthnot Commercial ABL supports Lancashire-based manufacturing firm in a seven-figure management buyout

By Bridging Loan Directory 3rd August 2023

Arbuthnot Commercial Asset Based Lending played a pivotal role in supporting the seven-figure management buyout (MBO) of Barons Contract Furniture (Barons), a specialist contract furniture manufacturing business located in Lytham Saint Annes.

Led by Managing Director, Garry Smith, and backed by investment from River Capital, this MBO marks a significant milestone for Barons and signifies the first investment from River Capital’s newly launched North West Private Equity Fund.

To secure this mandate in a competitive process, Arbuthnot Commercial ABL delivered a structure that enhanced post-completion financial headroom.

The successful completion of two previous deals with River Capital and Brabners Deal Advisory over the past 18 months was instrumental in establishing confidence.

The comprehensive funding package not only reinforces Barons’ current success but also provides vital working capital to drive future expansion.

Having recently celebrated its 50th year in business, Barons has built a strong reputation for producing quality furniture to the highest standards and distributing nationwide to a customer base that includes a portfolio of care homes, hospices, challenging behaviour, and other care facilities.

Alongside Garry Smith, the board has been bolstered by the introduction of Gary Lasham as Chairman, and David Meltham as Non-Executive Director, both of whom bring extensive industry experience and expertise in fostering growth.

Commenting on the transaction, Paula McGrath, Brabners Head of Deal Advisory, who advised Management and Newco on the transaction, said:

“We have a history of successful collaboration with Arbuthnot Commercial ABL, and we have confidence that as long as we structure a deal that aligns with our feasibility, Arbuthnot will deliver.

Their understanding of the credit requirements, along with their sensible debt levels, pricing, and structure, instill a high degree of certainty in our transactions.

With the investment from River Capital and the funding from Arbuthnot, the future of the business is exceptionally promising, with a robust order book and exciting prospects ahead.”

Andrew Rutherford, Commercial Director at Arbuthnot Commercial Asset Based Lending Limited, said:

“The successful completion of the sponsor-backed MBO of Barons is a testament to the dedication and collaborative efforts of the entire team.

This deal would not have been possible without the invaluable contributions of Paula McGrath of Brabners Deal Advisory, who helped us navigate through the complexities of the process, and River Capital, a highly supportive sponsor within the region.

We look forward to a fruitful partnership with Barons and are committed to providing flexible working capital funding post-buyout to help the management team drive their continued success.”