The growth of KSO in the UK
This year has been a transformational one for Kartesia’s Senior Opportunities (KSO) strategy across Europe, which now has on-the-ground representation in all of our key markets – Spain, France, the DACH region, the Benelux and the UK – and has closed transactions in a number of these jurisdictions.
In this edition, we will take a closer look at the development and expansion of KSO in the UK, following the appointment of Nick Holman in February as a Director to lead the origination, execution and monitoring of investments. Prior to joining Kartesia, Nick was a Director in Santander’s Structured Finance team and, before that, worked in the leveraged finance and syndication departments of Lloyds Banking Group, where he completed a broad range of European leveraged and high yield transactions for large and mid-market sponsors. Nick has also been joined in London by Karan Patole, who was recruited from 23 Capital to focus on the UK market.
Nick and Karan, working closely with Jaime Prieto, have worked selectively but quickly to identify opportunities in the UK market and have already managed to close four deals in the five months since June, evidence of the strong name Kartesia has established in the UK and elsewhere in Europe. Each of these deals came with their own challenges, often related but not limited to the impact of the coronavirus on a variety of sectors. However, with Nick’s experience and the expertise of the firm as a whole, coupled with the ability to provide flexibility in pricing and size of financing solutions, the team has been able capitalise on a number of interesting opportunities in this market.
In June this year, Nick led the completion of the first deal for Kartesia from its KSO I fund in the UK with the refinancing of The Clearway Group, which specialises in providing technology-led solutions to monitor and protect vacant properties in the UK and France. The final transaction structure offered a comprehensive solution to support The Clearway Group in its strong growth trajectory, with a £26m financing package comprising term loans and a Capital Expenditure / Acquisition facility. Clearway is a company Nick knows well from his previous role at Santander meaning that, despite the difficulties caused by the turmoil of the early stages of the pandemic, the company was confident in Kartesia’s ability to deliver a well-priced financing solution.
Only two months later, the team announced the completion of a deal to provide a €29m senior loan facility to leading pan-European cloud telecommunications provider, Firstcom Europe, which is also headquartered in the UK. Kartesia’s speed to react to the coronavirus and support its existing portfolio companies quickly and efficiently was vital in meeting the tight deadlines required by FirstCom in refinancing its existing facilities, as we were able to turn our attention back to deploying capital from our KSO I fund sooner than some of our peers.
Kartesia’s flexible approach was also crucial in providing debt financing for Envisage Dental last month, along with our expertise in the dental health sector following previous investments in Vitaldent in Spain (September 2018), and Efficentres in France (December 2019). The team’s understanding of the market meant that it was quickly apparent that Envisage was implementing the right growth strategy, while the ability to lend small but grow with the business was essential for the minority sponsor.
Nick Holman commented:“I have been delighted with the progress made with the KSO I fund since joining Kartesia earlier this year, especially when one takes into account the considerable impact of the coronavirus on European companies. We have seen in the UK, that like individuals under ‘lockdown,’ not all companies have been impacted equally under coronavirus, and many have remained resilient or have proven highly capable of adapting their business models to prosper under the ‘new normal’. We have actively targeted these defensive assets; taking advantage of the opportunity to deploy capital at very attractive risk-adjusted returns and with strong lender controls, taking advantage of the gap left by Banks and Funds focusing on their existing portfolios.”
We have been able to continue to deploy capital and invest in innovative, resilient businesses in the UK, solidifying our position as one of the leading providers of credit solutions for Europe’s SMEs.”