Montagu’s small LBO unit in debut deal

The small-cap unit of Montagu Private Equity has completed its first deal since gaining independence from HSBC, backing a management buyout of legal services provider Enact.

Montagu Capital, the small-cap buyout operation of Montagu Private Equity, has completed its first deal since gaining independence from former parent HSBC Group in March.

 

The unit, which targets UK deals in the £3m to £30m sector, has funded the management buyout of Enact, a provider of volume legal services for remortgaging and conveyancing transactions based in Leeds. The business was launched by Addleshaw Booth & Co, a corporate law firm, in April 2000 and works for UK banking clients including Barclays, Woolwich, Northern Rock and the Co-operative Bank. 

 

Financial terms of the transaction have not been disclosed, although a spokesperson for Enact said that management would take a majority interest in the business. Debt financing for the transaction was provided by Bank of Scotland. UK law firm Pinsents advised Montagu on the transaction.

 

Montagu Capital, prior to the buyout from HSBC known as HSBC Ventures, held a first close on the Montagu Capital Fund, following a £25m cornerstone commitment from HSBC in March of this year. According to Montagu's CEO Chris Masterson, “Montagu Capital Fund is targeted at the micro-mid cap market, the below-£50m enterprise value businesses that are off the radar for our main fund.' The fund is targeted at £125m.

 

The fund will typically look at UK deals in the £3m to £30m sector, including MBOs, IBOs, buy-ins and development capital situations. It will invest across a broad range of businesses, including manufacturing, services and consumer sectors. Montagu will invest between £1m and £10m in equity per transaction.

 

Montagu was selected ahead of a number of unnamed private equity firms based in the UK, according to a spokesperson. Martin Green led the deal on behalf of Montagu Capital, with the assistance of Andy Leach and Mahmoud Atalla. Martin Green said: “We are excited by the sustained growth Enact is achieving in its core market and believe that, in time, related market opportunities will enable us to add considerably to the value of the business.”