Funding to support acquisition and growth
Caple supports research firm with access to unsecured lending to fund acquisition
Caple, the alternative SME credit specialist, has supported market research agency IFF Research with fully unsecured loan over a five-year term.
IFF Research will use the loan to acquire Voluntas, another research agency. IFF Research expects to grow from c.£8m in turnover now to more than £12m in the next financial year, as a result of both the purchase of Voluntas and organic growth.
SMEs such as IFF Research typically have difficulties raising money without assets to put up as security to banks. This means they often have to turn to personal guarantees or diluting their ownership by issuing equity.
Caple is the first in the UK to offer access to unsecured lending based on the future cash flows of the SME. The business requires no collateral or personal guarantees as security. Caple loans complement existing bank lending.
Caple originates loans through a local partner network of accountancy and business advisory firms. Brett Stacey from Assay Corporate Finance advised IFF Research.
Dominic Buch, co-founder and managing partner of Caple, said: “In an asset-light sector such as market research, funding options for acquisitions are extremely rare. This creates a barrier to growth and may push businesses to issue equity instead of raising debt.
“Our deal shows how we can help SMEs with strong management and cashflows, such as IFF Research, achieve their gaols while retaining full control of their business.”
Jan Shury, managing director of IFF Research, said: “IFF Research helps both public and private sector organisations to make more informed decisions. The deal with Caple and the purchase of Voluntas enables us to enhance this capability and provide expertise on the UK housing market.
“This is our first acquisition and both Caple and our advisers, Assay Corporate Finance, ensured the deal was smooth and that our acquisition was a success. As important, the unsecured nature of the loan means our directors did not have to dilute our ownership in the business by giving up equity to complete this acquisition.”
Established in 1965, IFF Research is a full-service research agency with a track record of delivering high-quality strategic research for both the public and private sector.
The London-based firm has expertise across a range of sectors including learning and skills, employment and benefits, regulation, higher education, and financial and professional services. Clients include the Department for Education, the National Audit Office, Sport England, NFU Mutual and Cardiff University.
IFF Research acquired Birmingham-based research agency Voluntas because of its complementary housing market expertise. IFF Research will use the purchase of Voluntas to supports its ambition of getting into the housing sector and creating a larger and more diversified business.
As a result of the acquisition, IFF research will also develop Voluntas’ proprietary technology platform that enables clients to access actionable insights in real time. IFF Research will harness the platform for its clients and further build the technology to deliver greater value to them.
Brett Stacey, partner at Assay Corporate Finance and who advised IFF Research, said: “Assay Corporate Finance was delighted to work with Caple to help provide funding for our client IFF Research. Caple’s terms enabled IFF Research to make a strategic acquisition without the need to dilute the directors’ shareholding. The Caple team were professional at all times and stuck to their proposed timing schedule during the transaction.”
The loans Caple facilitates are part of BNP Paribas Asset Management’s SME Alternative Financing direct lending platform, which enables SMEs to access funding from institutional investors. BNP Paribas Asset Management aims to provide €1bn per year in funding to SMEs across Europe and €400m in the UK.