ThinCats provides clear vision for MBO
A Leicestershire optometrist has undergone a management buy-out after landing a funding deal from Ashby de la Zouch alternative finance specialists ThinCats.
Twelve years after buying a partnership share in Edmonds & Slatter, Tim Cole, a dispensing optician and Saggar Hirani have bought out the shareholding of Karyn Slatter, who had been looking to exit the business, using funding sourced from ThinCats.
Simon Brook, head of credit, ThinCats said:
“This sort of business is superb from a credit perspective. People will keep going back to the same optician, generating regular cash flow. E&S, which offers a higher quality of service, does not seem to have been impacted by competition from the likes of Specsavers. It’s a nice deal.
“The asset cover ratio needed for the MBO was 20-times – not something high street lenders are comfortable with. Tim and Saagar initially approached the business’ bank, which first offered them less than they required and subsequently dropped the offer further. Another bank offered them significantly less so that didn’t work either, as the vendor wanted the full amount up front.”
Things took a turn for the better when the firm’s accountant contacted East Midlands-based brokers, Reservoir Finance.
Stuart Milton from the Reservoir Finance said:
“Most businesses really don’t seem to be aware of ways of raising capital other than through high street lenders.”
Reservoir, however, did. The broker contacted ThinCats and another alternative lender.
“Within a couple of days of contacting ThinCats, we had an agreement in principle for the facility.”
The local ThinCats business development manager, Matthew Lawrence, met the management, saw the premises and labs, spoke to his credit committee and was able to quickly agree the full sum.
“It’s the speed of the process and the understanding of the business that made the borrowers decide to go with ThinCats. A large part of it was Matthew’s availability to meet the management.”
After the MBO, the business will be run through a limited company, with Tim Cole and Saagar Hirani as joint owners.
“We’re delighted to have found ThinCats through Reservoir Finance. From the first meeting with Matthew Lawrence it seemed clear that they had an appetite to lend and would structure a bespoke loan to meet our needs, rather than provide something off the shelf. Part way through the process it became clear that it would be easier to pay Karyn in full on day one and after quick consideration they were able to lift their offer by 20% to suit. This enabled us to fully focus on running the business from day one.”