FRP Advisory, the business advisory firm, has acquired Litmus Advisory, the debt advisory firm and specialists in structuring finance for companies and private equity firms looking at asset based lending (ABL).
The arrival of a specialist debt advisory team is part of FRP Advisory's continued incremental expansion of its services from offering both restructuring solutions for companies, lenders, and investors to advice for companies looking to raise finance as part of an organic growth or mergers and acquisitions strategy.
The three directors of Litmus Advisory, Dave Edwards, Nick Grainger and Andy Dimmock, join FRP Advisory as partners based in the firm's London office. They will continue to provide advice for a range of borrowers across the UK, US and other leading western European countries on the structuring of debt facilities and who are likely to use asset based lending. The three new FRP Advisory partners are experienced in debt finance advisory for sectors ranging from the food, retail and consumer industries to engineering, manufacturing and professional services.
Since Litmus' formation in 2004, Edwards, Grainger and Dimmock have collectively advised on and arranged debt finance for borrowers. Over the last five years they have been involved in over 80 transactions, often M&A, with a combined lending value of around GBP1 billion. During the last 12 months Litmus Advisory has sourced, structured and arranged over GBP150 million of debt in a variety of trading sectors for UK and other European borrowers.
The trio's arrival as partners at FRP Advisory complements the rest of the firm's breadth of experience in offering business advisory solutions across industry sectors, often at points of business critical change for management.
Geoff Rowley, partner at FRP Advisory, says: “FRP Advisory is constantly looking to meet the needs of management and lenders as they look for diligent, commercial advice at periods of critical change. The welcome arrival of Dave, Andy and Nick, three experienced, proven debt advisory professionals, is a response to demand from clients for our independent advisory services as we help them through their periods of growth and change in their quest to create value. We look forward to continue growing our range of financial advisory services."
Dave Edwards, managing director of Litmus Advisory and now partner at FRP Advisory, says: “The FRP Advisory culture and ethos of a partner-led, senior hands on approach to providing business solutions and advice fits with what Nick, Andy and I have been doing for the past 12 years in debt advisory with Litmus. This is an exciting time for the ABL market both in the UK and increasingly across Europe and we look forward to incrementally growing the debt advisory offering as part of the bigger FRP Advisory family, helping companies across all sectors with the provision of independent, objective, debt finance advice.
Our joining FRP Advisory allows the continuation of our independence from full service firms or providers of finance, ensuring our objectives can be fully aligned with those of our clients – unaffected by conflicts of interest."
Edwards, Grainger and Dimmock advise on the structuring of debt facilities for clients seeking to use asset based lending, often first time users and typically in three key situations: refinancing; acquisitions, disposals or mergers; restructurings. In M&A sponsors such as private equity firms may seek acquisition or merger financing for a corporate finance transaction such as a management buy-out or buy-in. Asset based lending is used as an alternative to cash-flow based debt structures in order to increase or optimise the level of debt available to a borrower and minimise the burden of debt amortisation.
Litmus' assignments have typically involved raising funds of between £5 million and £150 million, with a sweet spot of between £10 million and £50 million, in order to refinance existing funding arrangements or to provide acquisition finance and working capital for primarily sponsor-backed corporate finance transactions.
Edwards founded Litmus Advisory in 2004 and brings to FRP Advisory nearly 30 years of financial services experience in receivables finance and ABL. He has been involved in every Litmus assignment, predominantly in initial scoping, structuring and closing. Edwards started his career with Credit Factoring International, which later became Lombard NatWest. He was pioneering in his use of ABL for private equity buyouts which was considered a rarity at the time and was hired by GE Capital in 2000 to launch its big ticket ABL offering in the UK.
Dimmock joined Litmus in 2004, while Grainger joined in 2005 and each bring over 25 years of experience in the ABL and related specialist debt advisory markets. Dimmock works extensively with asset based lenders and valuers to enhance debt offerings to Litmus clients. Dimmock has been involved in the ABL industry in the UK since its inception and was approached in 1997 by GE Capital to bring all ABL to the UK market. He established GE’s operations in the Midlands.
Grainger focuses on structuring and optimising lender terms. He has a thorough understanding of product range and, most importantly ABL’s appetite for risk, enabling him to provide clear advice to his wide-ranging client base. Prior to joining Litmus, Nick had a similar role in the ABL market having held senior positions with LloydsTSB, NM Rothschild and GMAC Commercial Finance, ensuring he has a depth and breadth of understanding of the industry and network across both sponsors, corporate borrowers and lenders.