Background

A London-based investment firm was involved in a competitive auction process to buy the shares of Cumbrian-based paper mill, Pelta Medical Papers, a specialist in manufacturing barrier papers for the medical sector. The business was being sold by listed multinational pulp and paper group BillerudKorsnäs AB, based in Sweden, as the company no longer considered the UK business to be core to its future strategy. The investor was seeking to raise asset-based finance to support both the acquisition and, ongoing working capital requirements, and appointed FRP to manage the debt-raising process.

Action

FRP’s Debt Advisory team was engaged to find an asset-based lender who had both the desire and capability to finance the transaction via a debt structure that would leverage against the significant assets of the target business. Having reviewed and considered the core data, the team quickly identified a shortlist of lenders best placed to deliver the required financing structure, and who could meet or exceed the investors key financing requirements. This resulted in two lenders being invited to submit board-approved terms, with two highly competitive and market-leading financing offers duly received.

Outcome

After a short period of discussion, during which both offers were further enhanced, the investment firm selected a preferred financing partner, who was chosen due to its finance structure most closely matching the original brief. FRP then advised the investor and Management during the legal documentation stage and through to the completion of the transaction.