Barclays Backs Clydesdale Buy-in –

Clydesdale Financial Services Ltd, the consumer credit division of Next PLC, was sold in a deal totaling GBP108 million. The management buy-in was backed by Barclays Private Equity, which invested GBP25.5million. The company was bought for GBP89.4 million and a further GBP18.6million of funding was provided to meet the initial growth plans for the business.

Bank of America provided GBP70 million securitization and working capital. Intermediate Capital Group provided GBP12.5 million in mezzanine funding.

Clydesdale provides store cards and interest free credit products to retail clients and was originally acquired by Ventura, a subsidiary of Next in 1994.

The management buy-in team was led by Bob Jones who was chief executive of Lombard Tricity Finance. Jones transformed the company, so it was no longer making losses but substantial profits, in two years.

The team also included existing Managing Director Craig Murray, Richard Banks, who was financial director of Lombard Tricity Finance, and Alan Evans who was responsible for Colonial’s entry into the consumer credit market. They are to take a 10% stake in the business and Barclays will take the remaining 90%.

Bob Jones commented: “This company is the perfect platform for an MBO/MBI team to develop a substantial and profitable business in the point of sale finance sector. We intend to grow Clydesdale substantially in its present market place but also have plans for the support of retail sales over the Internet.”

Owen Clarke of Barclays Private Equity said: “The market for retail point of sale finance is substantial, with new business reaching GBP10.9 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.”