Shard Credit Partners has surpassed £40 million of investment in the North East of England
Shard Credit Partners has provided acquisition financing to SKS Business Services Limited (“SKS”) to support its acquisition of the tax, accounting, audit and outsourcing services of Bailey Group.
Headquartered in Peterlee, County Durham, Bailey Group is an award-winning chartered accountancy and tax advisory practice. The Group operates ten offices located across the North East of England employing seventy people. Bailey Group provides high-quality accounting services to more than three thousand SME customers.
The acquisition of Bailey Group will provide SKS with a strong presence and established customer base in the North East of England. The addition of an operation in the North East means SKS now has a presence in five out of the eight UK regions, including the East of England, the South East of England, London, the North West of England. SKS has rapidly become one of the UK’s leading SME-focused accounting services and tax advisory firms through its network of offices across the UK with client numbers growing to nearly twelve thousand, up from three thousand in 2018.
As well as increased geographical reach, SKS’s buy and build strategy has delivered strong revenue growth from £5.6 million in June 2018, to over £16.8 million (as at 21 September 2020, pro forma for the Bailey acquisition). With the addition of Bailey, SKS’s consolidated group EBITDA has increased from £1.2 million to £4.8 million in the same period.
The acquisition funding was provided under a committed facility of £20 million provided by Shard Credit Partners. The facility was recently increased from £10 million in August 2020. In recent years, SKS has successfully acquired eleven businesses using funding from Shard Credit Partners. This transaction is the second buy-out of a Durham-based business financed by Shard Credit Partners in the past year, and the fifth consecutive buyout transaction completed in the North of England in the past two years. Shard Credit Partners is now one of the most active investors in the North and specifically the North-east. Shard Credit Partners is working on further mandates in the region which are expected to complete in the coming months.
Shard Credit Partners’ strategy is to become a leading provider of capital to companies focused on achieving transformational growth and expansion in the North of England. In the past 18 months, Shard Credit Partners has invested more than £50 million across the whole region. Investments in the region include Management Buy-Out and M&A Buy-and-Build transactions, as well as growth capital expenditure financing.
Shard Credit Partners CEO, Alastair Brown, said: “SKS’s acquisition of Bailey Group in Peterlee, County Durham, represents a landmark in its nationwide expansion strategy. We began our relationship with SKS nearly three years ago and this is its largest acquisition so far”.
Sanjay Swarup, Managing Director of SKS, said: “Our merger with Bailey Group merger is a huge leap forward towards attaining our goal of becoming a national firm. SKS’s infrastructure enhances Bailey’s capacity, allowing its accountants to spend more time advising clients through these extra-ordinary times we find ourselves in.
“I find Chris Bailey to be a no-nonsense person who is equally committed to providing business advisory, value for money accounting and tax services to his clients. SKS is all about helping firms such as Bailey Group achieve this quickly and successfully. We are also speaking to other firms in the North East and across the UK who are interested in merging with SKS and expect to unveil further accountancy firms joining SKS Group in the near future”.
Christopher Bailey, Director of the new SKS Bailey Group, said: “Bailey Group is delighted to merge with SKS Business Services, it is a nationwide and prestigious group that will help us provide the highest level of client service. I look forward to continuing my role within the new SKS Bailey Group. Merging with SKS provides us with the opportunity to offer a service that is centred on advisory, backed up with a range of more sophisticated services. This is important to us, particularly in the current climate, as so many local businesses are facing financial problems and are looking for practical help and guidance from their accountants to plan for an uncertain future. We look forward to continue growing across the North East as part of the SKS group.”
SKS was advised by Jeremy Over at Moore Barlow and financial due diligence was conducted by David Preston at Mazars. Andrew Madden at Gateley Legal acted for Shard Credit Partners in relation to the senior secured unitranche facilities.
Contact details:
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About Shard Credit Partners:
Shard Credit Partners is an alternative investment fund manager focused on private credit strategies in the UK lower mid-market. Its funds seek to generate superior risk-adjusted returns from conservatively structured senior secured credit investments at low leverage, benefiting from robust documentation and full covenants. Shard Credit Partners is currently investing from its debut direct lending fund Shard Credit Partners Fund I, which held a first close in October 2017 at £90 million. Shard Credit Partners plans to hold a first close on its second UK lower mid-market direct lending fund during the first quarter of 2021.
Shard Credit Partners invests in solid small to medium sized businesses with strong management teams, supporting them by providing transformative growth capital and event driven financing in support of innovation, growth and expansion. The fund invests in businesses across all sectors and throughout the UK. The firm has a strong ESG focus; in particular, it is a strong supporter of female entrepreneurs and firms with meaningful female leadership and senior management.
Recent investments include the innovative double MBO of BW Legal and PRAC Financial in Leeds, which was named by Insider Media as their Deal of the Month for February 2019. In the same month the fund also backed the primary MBO of GadCap Technical Solutions Ltd in Newcastle. In September 2019, Shard Credit Partners completed the MBO of Alexander Technologies Europe Limited in Peterlee, County Durham. In March 2020, Shard Credit Partners backed the MBO of Jackson Lees Group in Merseyside by its senior management team. The fund is currently working on a number of live mandates around the UK for completion in the fourth quarter of 2020.