Killby & Gayford (K&G), a London-based refurbishment contractor, has undergone a secondary management buy-out.

The management was backed with an investment of £13 million from Close Brothers Growth Capital, an equity and debt finance provider.

The company will remain a privately-owned business and continue to be run and predominantly owned by the management.

Private equity firm 3i, which backed the original management buy-out in 1998, has sold its stake in the company. Former chief executive Terry Smith has also sold his shares in the company. As a result of Terry Smith’s retirement, current managing director Chris Chivers steps into the position of chief executive.

Chivers and construction director Chris Boyle hold equity from the original buy-out and will reinvest part of their sale proceeds.

James Blake and Justin Slabbert of Close Growth Capital structured and delivered a funding package achieving the price target of the vendors and delivering an equity majority to management.

Martin Kitcatt at Wyvern Partners introduced the management team to Close Growth Capital.

Slabbert said: “The management needed a funder that could respond quickly and offered certainty of delivery as management had only two weeks to find a funder to underwrite their offer.

Commercial due diligence, performed by Martin Bean at corporate advisory firm CIL, confirmed the company’s leading position and the positive market environment”, Slabbert continued.

Tenon Corporate Finance provided financial and management due diligence to Close Growth Capital, advising the firm on a transaction for the third time.

From Tenon the financial due diligence was led by Peter Vandervelde and Sue Pople with the management due diligence headed by Kate Turner and Jan Bailey.

Apart from Close Growth Capital the new major shareholders are Chris Chivers, Jeremy Vickers, Chris Boyle, Jon Coles, Richard Bell and Kevin Browne.

In addition to Chivers’ promotion to chief executive, the new holding company board will comprise of Vickers as finance director, non-executive chairman Robin Williams and non-executive director from Close Growth Capital James Blake.

Chris Mardell will continue to operate as regional operations director to develop the Cambridge office.

K&G’s turnover at the time of the MBO in 1998 stood at £37 million and steady growth since that time has seen the group expand to a turnover of £69 million, according to the group’s website.