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Case Study

Rail engineering group undergoes management buyout with £2m funding facility from IGF

Enable

Rail engineering group, Enable, secured a £2 million funding facility from Independent Growth Finance (IGF) for a management buyout (MBO) during the height of the COVID crisis.

The London-based consortium was built upon the desire to streamline the supply chain, reinforce quality control and deliver projects with trusted partners as a ‘one-stop-shop’. One of the four businesses that sit underneath the group dates back to 1985. By bringing them together, Enable is able to provide everything from full design and engineering capabilities to plant & equipment and project delivery.

An underserved sector

Working capital funding for the construction and rail industries is often difficult to find due to the complexity of the industry and its contracts. Rupert Rawcliffe, Founder of SRC Corporate Finance saw the strength in the business and introduced the client to IGF.

Rawcliffe explains: “The lending pool in this sector is reduced, so an understanding of individual businesses is key to setting up a funding relationship. A significant amount of trust was built between IGF, SRC Corporate Finance and the client to ensure funding was delivered. In the business IGF recognised a strong management team, good clients and substantial long term contracts with government and external customers. Their pedigree and reputation in the market is unrivalled.”

In addition to working on an MBO, the group had to navigate lockdown and new challenges around safe and distanced working amidst the pandemic. Opting for an asset-based lending facility, the group is able to extend the funding as additional working capital as they grow, or use it as a safety net during times of cashflow uncertainty.

The MBO team at Enable, explain: “Funding was needed for a period of time post the buyout as cash reserves had been depleted by the transaction. We needed a safety net and extra headroom to ensure a smooth transition. The ABL facility with IGF works because it grows with us. The more invoiced value we have, the further the funding extends.”

Flexibility to counteract uncertainty

Jon Hughes, Director at IGF, added “A management buyout in the height of the COVID crisis was never going to be simple. The key here was the relationship built with the advisor and the leadership team. We took the time to understand the business and get to know the client. This enabled us to offer a competitive and flexible funding solution that will continue to meet the business needs in an ever-changing landscape.”

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