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Shard Credit Partners announces the acquisition of a further four chartered accountancy practices by SKS Business Services Ltd (“SKS”or“the Company”).  The acquisitions were funded under a £10 million senior secured unitranche facility, which was committed by Shard Credit Partners Fund I (“the Fund”) in May 2018.  SKS is an award-winning firm of chartered accountants providing accounting, bookkeeping, tax, payroll and outsourced finance function services to more than eight thousand SME customers located throughout the UK.  SKS also has an established and growing insolvency business. 

Since the date of the initial financing in May 2018, SKS has been able to rapidly accelerate its acquisition growth strategy, as it seeks to become a top twenty UK accounting firm and grow nationwide.  Recent acquisitions have significantly expanded the geographic footprint of SKS, which now has a presence across four out of eight of the UK regions, including the East of England, the South East of England, London and the North West of England.

Under its successful buy-and-build strategy, SKS has completed ten acquisitions in total since May 2018, using finance arranged by Shard Credit Partners.  This brings the total number of acquisitions completed by SKS to 18 since November 2013. 

SKS has continued to build its impressive financial track record, achieving strong growth in LTM revenues from £4.7 million in June 2018, to over £11.9 million currently.  LTM EBITDA has grown from £1.2 million to £3.3 million pro forma for the four recent acquisitions.

SKS operates a vertically integrated offshore operating model with 100 staff in the UK and 250 professional support staff located across seven offices in North-West India.  SKS provides its customers with high quality accountancy, tax, business advisory and insolvency services at competitive prices. 

SKS’s four recent acquisitions of Westlake Clark, Baker Watkins, Thompson Jones and Cansdales were completed during summer 2019.  Westlake Clark has offices in Southampton, Lymington and New Milton, which are new geographic markets for SKS.  Westlake Clark provides accounting, bookkeeping and tax services to more than one and a half thousand clients based predominantly in and around the South of England.  Baker Watkins is a firm of chartered accountants based in Stevenage, Hertfordshire.  This acquisition provides a strong, stable portfolio of businesses that adds over two hundred and eighty mainly small business clients.  Thompson Jones is an accounting practice based in Bury, enabling SKS to further expand geographically by acquiring a highly performing, diversified practice.  Cansdales, based in Buckinghamshire, provides a broad range of services to businesses, individuals and not for profit organisations.  

These acquisitions will enable the previous owners to successfully exit their businesses over a period of time, whilst realising the value of their enterprise and ensuring that their valued customers will continue to benefit from high quality professional accounting services under the umbrella of a larger group that is expanding in line with its strong nationwide growth ambitions.

Shard Credit Partners CEO, Alastair Brown, said, “SKS’s remarkable growth story over the past eighteen months is a testament to our strategy of providing transformative growth capital to SMEs in the UK lower mid-market to unlock rates of growth not otherwise achievable with other forms of financing.  Our loan commitment has enabled SKS to almost triple its EBITDA through acquisition in eighteen months, whilst maintaining very moderate net financial leverage at under 4.0x. SKS’s unique proposition of securing acquisitions at attractive EBITDA multiples in combination with post-completion restructuring and offshoring of accounting work to India is highly EBITDA accretive”.

Sanjay Swarup, Managing Director of SKS, said “SKS’s acquisition-led growth strategy is now proven and continues to drive interest from accounting business owners looking for an exit through a sale.  We have a strong pipeline of acquisition candidates throughout the UK and expect to compete several more transactions in the coming months”.

Shard Credit Partners is a UK lower mid-market-focused direct lending fund established to provide flexible long-term growth capital to UK SMEs.  Since completing the initial SKS financing in May 2018, Shard Credit Partners has completed three MBOs in the North-East of England during 2019.  Shard Credit Partners Fund I has facilitated the completion of thirteen individual company acquisitions to date throughout the UK, from a combined total of £38 million of financing commitments. 

ENDS

Shard Credit Partners announces the signing and completion of a £10 million senior secured unitranche facility to SKS Business Services (“SKS” or the “Company”). The investment has been made from Shard Credit Partners Fund I, a UK lower mid-market focused direct lending fund.

The unitranche facility, which includes a £10 million accordion feature, will enable SKS to execute its near-term acquisition pipeline. The Company is pursuing a buy-and-build strategy and has acquired eight businesses in the chartered accounting and business services arena in the past five years. SKS aims to become a top-twenty accounting firm in the UK within the next five years.

SKS is an award-winning firm of chartered accountants providing accounting, bookkeeping, tax, payroll and other outsourced professional services to more than three thousand UK SME customers. The firm has 40 customer facing staff operating from offices located across the South-East including London, Reading, Farnham, Croydon and Tunbridge Wells.

SKS is unusual in that it operates an innovative, vertically integrated offshore operating model with 145 professional support staff located across four offices in North-West India. This enables SKS to provide its customers with high quality outsourced services at competitive prices.

SKS can offer a strong proposition for running the outsourced finance function for its SME customers, putting them on a more equal footing with larger corporates, which have outsourced such functions for more than a decade. This includes providing everything from day-to-day bookkeeping, running payroll, monthly and quarterly reporting and tax planning to working with management to develop business plans through detailed financial modelling.

SKS is entrepreneur-owned and was established in 2007 by Sanjay Swarup, a chartered accountant with a background in natural resources.

Sanjay Swarup, Managing Director of SKS said, ‘’SKS has a significant number of attractive opportunities to grow the business and increase its market presence nationwide. Shard Credit Partners is an ideal partner to assist with this growth. The funding is structured in such a way that Shard Credit Partners Fund I directly benefits from the growth in the value of the Company.

So far, SKS has over recent years focussed on acquisition growth in London and the South-East. With committed long-term growth capital funding now in place, we are well placed to scale up nationally. We would like to hear from accounting practice owners who are looking to exit or part-exit their practice and ensure a positive legacy is retained.”

Alastair Brown, Chief Executive of Shard Credit Partners commented, “We are delighted to be supporting SKS in the next important phase of its transformational acquisition growth strategy. Sanjay and his team have developed a highly effective acquisition model, whereby target identification, structuring and integration have been streamlined to ensure a fast-track process and achieve meaningful financial synergies. SKS’s India-based professional support infrastructure is easily scalable and can deal with the absorption of several acquisitions simultaneously.

Furthermore, SKS exhibits strong environmental, social and governance (ESG) credentials, which we are proud to support. Across the business, 58% of its staff including senior management are women, which is the result of a deliberate strategy of diversity and equality in the workplace. ESG is increasingly important to our institutional investors”.