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A 108-year-old independent wholesaler and distributor has been bought by its management. The Nield Group, which supplies toiletries, health, beauty and household cleaning products, has been bought by five of its directors.

The buy-out team was led by chief executive Richard Ormerod, who was supported by Matthew Sowerby, David Menon, Lester Lee and Steve Fallon.

When Ormerod and his team decided to bid for the group they approached Lee Teste and Julian Casstles at TMG Corporate Finance for advice. TMG recommended several asset-based financiers to back the deal.

The buy-out team chose Venture Structured Finance, which provided an asset-based finance package worth some £10 million through its City Invoice Finance subsidiary.

The firm’s funding, which comprised a revolving stock facility, cash flow loan and confidential invoice discounting facility, was co-ordinated by business development manager Cyril Ryder.

“Having conducted preliminary meetings we were convinced by Venture Structured Finance’s ability to deliver and support the successful completion of the MBO,” Ormerod said. “The confidential invoice discounting facility will also continue to provide financial headroom over the coming months.”

Casstles said this transaction allowed management to not only buy the company but to re-shape its working capital. “We believe that this deal secures the basis and foundation for management and the business to continue to deliver the high standards achieved historically, whilst also allowing management to broaden the product range, offer customers better margins and react to customer orders more quickly.

“The funding package offered by Venture Finance provides management with a tailored solution to both the MBO and the availability of headroom to assist in the future growth of the business,” he added.

City Invoice appointed SHM Smith Hodgkinson to provide professional inventory valuation services on the Nield Group. The valuations were managed by Christian Humphreys, an associate director and head of asset-based lending.

Humpreys said his team completed inventory site inspections of Nield’s three divisions, which included its health and beauty and cash and carry operations. “Professional valuation advice was completed within six working days allowing the funder to propose terms efficiently and precisely.”

Nield operates from a 700,000 sq ft distribution centre in Accrington and a site near Manchester. The company generates a turnover of more than £40 million providing its products to more than 4,000 independent retailers.

The group has a wholesale distribution operation as well as a cash and carry business serving trade and the public. It also sells its products through a partnership agreement with a supermarket, where it is an official distributor for a number of leading brands.

SHM Smith Hodgkinson

SHM Smith Hodgkinson is a leading appraiser, valuer and auctioneer of plant, machinery, real estate and business assets. It provides independent advice, specialist skills and commitment to quality. SHM combines significant financial firepower and balance sheet strength to remove any risk or uncertainty through guaranteed valuations, whilst retaining focus and a total commitment to each individual client.

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