Eldapoint (United Kingdom) - Oct 2007

unquote
01 October 2007

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Close Growth Capital (CGC) has provided a hybrid equity and debt package to undertake the buyout of shipping container company Eldapoint Ltd. The deal sees management realise some value from the business and roll over the majority of its equity into the newco, in which it will retain a 70% stake with CGC holding the balance. The value of the deal was not disclosed, but CGC reported that it was towards the lower end of its £5-35m enterprise value investment range. Barclays provided £2.5m of additional banking facilities in the form of a term loan, as well as working capital to support the deal. CGC was introduced to the business in late May by Grant Thornton, which ran an auction process to facilitate the buyout. CGC beat off competition from three or four other parties including GE Capital. The deal took two months to complete from exclusivity. CGC was attracted to the business due to the good prospects for underlying growth in the sector. Due to the balance of trade, UK ports are experiencing growth and all of those ports require container-handling services. Eldapoint is expected to grow organically through geographic expansion and acquisitions.

Company Eldapoint was founded in 1968 and is headquartered in Liverpool. Originally a general refrigeration service company, it later expanded into container refrigeration and now has service depots at major ports where it provides container storage, handling and repair services to shipping lines and container leasing companies. From 2000 onwards, Eldapoint decided to capitalise on its container repair and conversion capabilities, and became a manufacturer of steel anti-vandal accommodation/storage cabins. In addition to manufacturing and container services, the company also offers haulage and self-storage for private individuals and business customers. Turnover for the current year is forecast to be £26m, a 30% increase on last year, with EBITDA of £1.5m. Eldapoint employs approximately 200 staff.

People Garrett Curran led the deal for CGC alongside Justin Slabbert and Curran joins the board of the newco. David Clarke is managing director of Eldapoint and Stuart Chidley continues as finance director. Following the deal, Larry Kilby joined the company as business development director. He was formerly managing director of Maritime Transport Ltd. Shaun Cross worked for Barclays on the deal.

Advisers

Equity - Osborne Clarke, Alisdair Livingstone, David Ferris (Legal)Equity - Tenon Corporate Finance, Nick Williams (Financial Due Diligence)Management - Grant Thornton, Barry Moss, John Clarke (Corporate Finance)Management - Halliwells, Craig Scott, Sue Russell (Legal)

Sourced from: UK & Ireland unquote" 355 (Oct 2007)