Clydesdale Financial, the consumer credit division of Next plc has become the subject of a management buy-in led by Barclays Private Equity. Barclays Private Equity holds 90 per cent of the equity in the business and the management 10 per cent.
The total cost of the transaction was GBP89.4 million with a further GBP18.6 million funding made available to meet the initial growth plans for the business. Barclays Private Equity invested GBP25.5 million and Bank of America provided a GBP70 million securitisation and working capital package in support of the deal. GBP12.5 million of mezzanine financing was provided by Intermediate Capital Group.
Deloitte & Touche initiated the management buy-in alongside Bob Jones.
Clydesdale Financial has been in the Next group since 1994 when it was acquired by Ventura, a subsidiary of Next. Clydesdale Financial has 200 employees and it provides store cards and interest free credit products to retail clients such as Karen Millen and Focus DIY.
The management buy-in team is led by Bob Jones. Jones was chief executive of Lombard Tricity Finance, where he was responsible for transforming it from crippling losses to substantial profit within a two year period. Craig Murray remains with Clydesdale Financial as its managing director. They are joined by Richard Banks as financial director. Banks is also ex-Lombard Tricity Finance. Also on the management team is Alan Evans as development director. Evans was responsible for Colonial’s entry into the consumer credit market.
Owen Clarke at 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.”