A funding deal from Ashby de la Zouch alternative finance specialists ThinCats has facilitated a management buy-out at a Leicestershire optometrist.
Twelve years after buying a partnership share in Edmonds & Slatter, dispensing optician Tim Cole and Saggar Hirani have bought out the shareholding of Karyn Slatter (who had been looking to exit the business) using funding sourced from ThinCats.
“The asset cover ratio needed for the MBO was 20-times – not something high street lenders are comfortable with,” said Simon Brook, Head of Credit at ThinCats.
“Tim and Saagar initially approached the business’ bank, which first offered them less than they required and subsequently dropped the offer further. Another bank offered them significantly less so that didn’t work either, as the vendor wanted the full amount up front.”
Things took a turn for the better when the firm’s accountant contacted East Midlands-based brokers, Reservoir Finance.
Stuart Milton from the Reservoir Finance said: “Most businesses really don’t seem to be aware of ways of raising capital other than through high street lenders.”
Reservoir, however, did. The broker contacted ThinCats and another alternative lender.
“Within a couple of days of contacting ThinCats, we had an agreement in principle for the facility,” said Mr Milton.
The local ThinCats Business Development Manager, Matthew Lawrence, met the management, saw the premises and labs, spoke to his credit committee and was able to quickly agree the full sum.
After the MBO, the business will be run through a limited company, with Tim Cole and Saagar Hirani as joint owners.