Mid-market private debt manager Beechbrook Capital has completed two new mezzanine loans through its second fund, Beechbrook Mezzanine II, as well as its first exit from Beechbrook Mezzanine I.
The two new investments are a mezzanine loan to Simply Biz, a business that provides compliance and business support to over 5,000 financial advisers throughout the UK, and a mezzanine loan to N-Sea, an integrated subsea infrastructure services provider and portfolio company of Dutch sponsor Value Enhancement Partners.
Simply Biz was seeking finance to make a corporate acquisition in order to expand its range of products and services. N-Sea was acquiring a UK competitor, so broadening the scope of the business and increasing its geographic reach.
For each deal, Beechbrook was required to tailor a flexible loan which met the requirements of the borrowers, fitted their existing capital structures and, crucially, could be delivered before the year end.
Beechbrook has now made three investments from Fund II since first close in May 2013 and the fund is now 35 per cent invested based on current commitments. Second close is scheduled for April 2014.
Beechbrook’s first full exit from Beechbrook Mezzanine I was completed in December, with the sale by private equity manager Kelso Place of MDNX, a managed data network provider, to Equistone. Beechbrook had supported the buy-and-build strategy of Kelso Place with a mezzanine loan in 2010.
Beechbrook partner Paul Shea says: “We are delighted with our first Fund II investments, while the investment in MDNX has delivered an excellent return to our investors and underlines the strength of the investment opportunity that exists in the lower mid-market. The pipeline remains strong in this part of the market as we continue to benefit from the dearth of finance from traditional lenders.”
Beechbrook currently has over EUR165m of assets under management and has now made 19 investments. Earlier this year, the firm announced a first closing of its second fund Beechbrook Mezzanine II, with EUR67m of commitments from the European Investment Fund, the British Business Bank and several leading private sector investors.
