Mobeus invests £9m in Factor 21 MBO

Kenny Wastell
15 November 2016

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Mobeus Equity Partners has invested ТЃ9m in the management buyout of Factor 21, a UK invoice financing company.

The size of stake taken by Mobeus remains undisclosed, though partner Jonathan Gregory told unquote" the firm had taken a substantial minority stake as part of the deal.

Capital for the transaction was drawn from Mobeus's fourth fund, which held a first close in July 2016 and is estimated to have a target in the £100-150m region.

Factor 21 directors David Tilling, Neal Errington and Darren Cottenden have each reinvested "significant" sums to acquire the business alongside Mobeus, according to a statement. RBS Invoice Finance has also provided a £50m working capital facility to support the company's growth strategy.

Under its new ownership model, the business will look to develop a UK-wide footprint, expanding beyond its two existing regional offices in Oxfordshire and Manchester. It anticipates significantly scaling up its team, Gregory said.

The company has also appointed former Bibby Financial Services CEO David Robertson as chairperson, while Mobeus's Gregory has taken a seat on the board in the role of investment director.

The deal marks Mobeus's fifth investment of 2016, following investments in aviation sector security training business Redline Assured Security, product design company Kinneir Dufort, hotel booking platform BookingTek and photography equipment marketplace MPB.

Company
Founded in 2001 and headquartered in Wallingford, Oxfordshire, Factor 21 provides SMEs with invoice finance facilities. It has 400 clients whose revenues range from £500,000-1m. Factor 21 has a turnover of £8m and generates EBITDA of £2.3m, Gregory said.

Advisers
Equity – PDT Solicitors (legal); Squire Patton Boggs (legal); Fairgrove Partners (commercial due diligence); RSM (financial due diligence, commercial due diligence); Alaco (management due diligence); ABL 123 (commercial due diligence).
Company – Wilson Partners, Adam Wardle (corporate finance); PDT Solicitors (legal).