introduction to bgf smmt meet the funder event · unsecured loans mezzanine debt junior debt...

Introduction to BGF

SMMT Meet the

Funder event

Solihull, 24th October 2013

Mark Bryant – Head of

Manufacturing

James Syrotiuk – Investment

Manager

Growth Capital for

UK private

companies • An ambitious provider of equity capital for private

companies, with a focus on growth

• Well funded – £2.5bn of capital committed

• £183m invested in 35 companies (so far)

• Strong appetite to support manufacturing sector

• Supported by leading UK banks

2

Government

Banks and traditional

debt providers

Alternative debt

providers

Equity funding from

BGF

The funding

landscape

Ordinary shares

Unsecured loans

Mezzanine debt

Junior debt

Overdraft

Senior term debt

Asset-backed debt

Ris

k Se

curi

ty

Grants and ‘low-cost’ loans

3

Uses of BGF

funding Companies use BGF investment for:

• Investing in operational capacity – people, buildings, plant and machinery

• Supporting development of new products, processes and markets

• Funding acquisitions

• Strengthening balance sheet

• Addressing shareholder needs

4

£2m to £10m investments (with appetite and firepower for further funding)

To support future, long term growth

10% - 40% of equity Always a minority partner – you retain control

Up to 50% cash out For shareholder realignment / de-risking

Flexible structures – equity / loan notes

To meet the need / align with shareholders and management

Long term money – no closed fund pressures

Typically 5 – 10 years. No drag rights. No forced exit.

Fairer legal approach Less onerous investor legal protections

A fast and focused investment process

Minimal disruption and distraction to the business, and a focus on minimising fees

Access to a huge network and support

To provide on-going support to the business…a junior partner

Industry / entrepreneurial experience

And “membership” of one of the most exclusive clubs of successful entrepreneurs

What we can offer

5

Observations on the

automotive sector • Generally vey positive news for UK plants: growth in

models and production volumes

• UK supply chain well positioned, struggling to keep pace with demand

• 20-30 years of hollowing out - investment required in capacity and capability

• Not well capitalised

• BGF not seeing expected scale of funding requests:

• Appetite for risk taking amongst owners?

• Long memories – is growth sustainable?

• Desire for free/low cost money?

• Appetite for dilution?

• Now is a good time to invest

6

Our Portfolio today

7

Our Portfolio today

8

VTL GROUP

2 4 O C T O B E R 2 0 1 3

9

Key reasons for looking into growth capital

Provide MT/LT funding for expanding our customer/product portfolio

through organic growth opportunities alongside bank facilities

Support our acquisition strategy (funding, experience and expertise)

Make further investment in our Indian subsidiary and expand our

Technical Solutions Centre

• Buy-out a retiring shareholder

10

Minority investor

Long term view

Resources available (financial, human, network)

Relationship with banks

New in the market and more flexible

Dynamic organisation and willing to do business

Business ethos/philosophy (fair, entrepreneurial, can do attitude,

look at the development potential)

Why BGF?

11

Experience so far …

Fair and flexible

In difficult circumstances remained committed to the deal and find ways to

make it work

All BGF people passionate about their mission to invest in SMEs

Keen to support in any way

Absolutely convinced it is the right partner for us even after a difficult and

lengthy process (due to internal reasons)

12

Potential for VTL with BGF on board

Raise VTL’s profile

Access to resources and experience/knowledge

More confident to do acquisitions

Provide further assurances to all stakeholders (customers,

employees, banks, suppliers)

13

• A new source of growth capital, equity investment without loss of control

• Ambitious investment partner that can support medium to long term plans

• Providing more than just money … guidance, networks, practical support

• Local presence with National reach

Mark Bryant James Syrotiuk

Head of Manufacturing Investment Manager

Email: mark.bryant@bgf.co.uk Email: james.syrotiuk@bgf.co.uk

Tel: 07557 232 046 Tel: 07841 494 229

Thank You

In Summary

14