Debt Advisory - H1 2019

Debt Advisory - H1 2019

24 July 2019

The Spectrum Debt Advisory team have had an exceptional H1 – completing 15 transactions and raising over £450m on behalf of company owners or private equity investors looking to fund acquisitions, raise working capital facilities or re-finance existing debt facilities.

In addition, a number of these deals also have incremental facilities in place to facilitate growth via acquisition and investment over the next three to five years.

Reviewing H1, Looking to H2

The team continues to dedicate much of their time to the Private Equity community, with 80% of deals in H1 completed on behalf of Private Equity clients. The team has worked with 13 different PE houses on transactions in H1 including Silverfleet Capital, Primary Capital, Horizon, Palatine, Alcuin, Inflexion, RJD Partners, and Sovereign Capital, to name a few.

Due to the increase in demand for debt advisory services, last year we welcomed Julie Lada to the team, based in our London office. Julie has extensive experience in the credit process and portfolio and capital management and has been supporting Ian Milne and Simon Sherliker on all debt advisory projects. In March this year we also opened a second office in London Soho, to house the expanding Spectrum London team; and we are continuing to invest in its growth.

The Debt Advisory business has seen significant growth in the past year, and in the 12 months to the end of June completed 28 deals, with a total deal value of £839m, and total financing packages of £624m; by comparison, in the same period the preceding year the team completed 25 deals, with a total deal value of £355m and financing packages of £192m.

Looking forward into H2, benefitting from a robust list of 'work in progress' deals and an excellent pipeline of opportunities stretching into the Autumn, the Debt Advisory team foresee a strong finish to 2019 and another record year in both deal volumes and value.

Deal Data 2018/19

A Selection of H1 Deals

Debt Market Update

The debt markets remain very much open for good quality transactions, large or small, and with or without a financial sponsor. There are many active market participants from the traditional banks, through to a competitive debt fund market, several ‘challenger’ banks, and a range of ABL providers.

The traditional banks are continuing to lend into the transaction market and while they struggle at times to compete on those transactions that are of interest to the debt funds in terms of overall quantum, flexibility and hold levels, for the right deals we are seeing the provision of non-amortising structures at attractive pricing. These lenders are also very active in the ‘super senior’ part of the market working alongside the debt funds and facilitating transactions.

We are also seeing more, albeit selective, appetite for the provision of leveraged finance solutions into smaller deals by the traditional banks with some providers recognising the merits of working with proven financial sponsors and developing relationships that offer the opportunity to grow with the client through buy-and-build programmes and, in due course, secondary and follow-on deals.

The debt fund market remains buoyant with new market entrants still a feature as well as continued growth and appetite for transactions from the more established participants.

The 'challenger’ bank market is also growing strongly both in terms of the number of players and their experience in working on transactions with Private Equity. Debt terms are inevitably more expensive than the established banks, but these providers are creating very useful opportunities and liquidity at the smaller end of the market and especially on deals in the £5m to £10m debt range.

Finally, the ABL market continues to be active driven in the main by the independent providers rather than the banks. New entrants and participants are similarly a feature of this market providing a range of options for borrowers as well as the overall ABL market becoming more adept at working with Private Equity and tailoring their facility provision accordingly.

Ian Milne, Managing Director and Head of Debt Advisory at Spectrum Corporate Finance.

Contact Us

To find out more about our debt advisory services, or to discuss a potential transaction, please contact a member of the team.

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