Barclays Private Equity has backed the £108m (E170m) management buy-in of Clydesdale Financial Services, the consumer credit division of Next plc..
The business was acquired for £89.4m with a further £18.6m of funding put in place to meet the initial growth plans for the business. Barclays Private Equity invested £25.5m. Bank of America provided £70m securitisation and working capital funding. Intermediate Capital Group provided £12.5m mezzanine funding.
The private equity firm will take a 90 per cent stake in the business and management will own the remaining 10 per cent.
Clydesdale provides store cards and interest free credit products to retail clients such as Scottish Hydro, Karen Millen and Focus DIY. It has a £75m loan book, has 170,000 customers and employs 200 staff from offices in Glasgow. The company was acquired by Ventura, a subsidiary of Next in 1994.
Bob Jones, who was chief executive of Lombard Tricity Finance, leads the MBI team. He will work alongside Craig Murray, who remains managing director.
Owen Clarke of Barclays Private Equity commented: “The market for retail point of sale finance is substantial, with new business reaching £10.9 billion in 1999. With the largest point of sale credit providers having left the mid-market, where Clydesdale operates, there remains significant opportunity to gain market share.
“The management team possesses the knowledge, ability and experience to grow Clydesdale’s loan book and client portfolio.”
Barclays Private Equity is a division of Barclays Capital, the investment-banking division of the Barclays Group. Company transactions typically range from £25m to £250m.