Arbuthnot Commercial Asset Based Lending (ACABL) has completed the financing of Pinnacle UK Group Limited (Pinnacle), a regional electrical wholesaler and distributor.
The flexible funding facility has supported private investment firm Strathray Capital Partners in acquiring a controlling stake in the business while leaving sufficient headroom for further growth.
The structured finance package comprised a revolving receivables line, a cashflow loan, and an RLS term loan.
Pinnacle was founded in 2011 as a traditional electrical wholesaler. The business operates from two locations, Bolton and Birkenhead. It subsequently developed a third division, Plumbing & Heating Supplies, to broaden its offering and customer base.
Having built the business since its formation, the two founders were looking to realise some value but wanted to stay involved with an equity interest, which this transaction allows.
Vernon Goldberg, partner, Strathray Capital Partners, said: “In line with our partnership capital approach, we were looking to develop an ongoing business relationship with a like-minded team that shares our values and risk outlook.
“We spoke with several banks, providing them with an understanding of our ambitions and how we like to work.
“The team at Arbuthnot Commercial ABL was both perceptive and pragmatic in structuring the transaction in a way that would give us maximum comfort.
“They put forward a proposal that provides the optimal level of headroom over the first couple of years and demonstrated additional flexibility in the way the facility was deployed.
“Arbuthnot Commercial ABL has deep experience in completing deals like this and they were as good as their word, delivering the transaction extremely smoothly.”
He continued: “Our ambition for Pinnacle is to create a regional powerhouse in electrical distribution, doubling the number of branches in the North West in the next two to three years.
The owners have done extraordinarily well over the last ten years and have built a strong business.
The deal we have struck has enabled the founders to take some money off the table. But in all other respects, they will continue to run the business as they have done before and are excited to go on and drive the planned expansion.”
Andrew Rutherford, commercial director at Arbuthnot Commercial ABL, said: “We are delighted to have supported Strathray Capital Partners with this transaction.
“This deal relied on a combination of factors that speak directly to our approach across all M&A deals; the combined focus on gaining a deep understanding of the requirements of both the investor and the business, speed of delivery, and the ability to maximise the quantum of funding available to achieve the next level of growth.”
