The deal

Management buyout helps Fargro capitalise on growth opportunity

We are pleased to have advised the team at horticultural solutions and products specialist Fargro on their successful management buyout (MBO).

Fargro has been trading since 1946 and has held a Royal Warrant since 1971. It also has an e-commerce brand – The Garden Superstore – which supplies the home and garden market. The West Sussex-based firm is the UK’s largest provider of pest management and other products to horticultural growers and amateur gardeners, and has enjoyed a highly successful operating year, capitalising on the increased consumer demand for gardening supplies.

It is now preparing for a period of growth following the completion of an MBO, which was backed by sponsor Ashridge Capital, supported by specialist bank Shawbrook through an asset-based lending (ABL) facility. Our Corporate Finance team led the transaction, raising equity finance, with the support of our Debt Advisory team which introduced the debt funders and advised on all ABL matters.

Richard Hopkins, Managing Director at Fargro, said: “This is an exciting time and we’re very well placed to meet the increasing demand for our products as the UK continues to work through the impact of the pandemic and growers maximise the post-Brexit demand for home-grown food and flowering plants.

“FRP have really demonstrated their worth. The uncertainty pre and post Brexit, followed by a pandemic, were challenging conditions to seek a PE partner and the accompanying ABL facility we needed to implement an MBO. It was immediately a great working relationship with the team. Their experience and advice in structuring our proposal was invaluable. They were able to guide me and my team through a complex process and found us the ideal PE sponsor in Ashridge Capital and Shawbrook as funding partner.”

Adrian Alexander, Corporate Finance Partner at FRP, said: “We were delighted to have introduced Shawbrook and Ashridge Capital to the management team. The horticulture sector has come to prominence firstly due to climate change and consumers concerns over ‘food miles’. Secondly, it has been one of the key beneficiaries of a difficult 12 months for the economy, with businesses like Fargro playing an important role in facilitating the uptick in demand as people have spent more time at home. Opportunities for growth will no doubt continue as homeowners demand more UK grown products and further indulge their new-found love for gardening, and we look forward to seeing Fargro going from strength to strength as a result.”

Adrian was supported by Nick Lovelock, Senior Manager in the Corporate Finance team throughout the transaction.

Nick Grainger, Debt Advisory Partner at FRP, added: “It is great to get another Private Equity backed MBO completed, where, in a tightly managed and competitive debt advisory process, Shawbrook was able to clearly differentiate its market offering in the delivery a comprehensive ABL debt structure. The deal is another example of our teams working together, with partners from our Corporate Finance and Debt Advisory divisions collaborating to create the best possible outcome for all parties.”