EMC
Deal Summary
Catalyst advised the management team on the buy-out of EMC Advisory Services Limited (EMCAS) backed by Lonsdale Capital Partners.
EMCAS is the leading provider of claims management services to consumers who have been subjected to inappropriate selling practices by financial institutions. The company specialises in handling consumer claims in the endowment, payment protection insurance (PPI), excessive credit card charge, irresponsible lending and investment product areas.
Founded in 2003, the company has grown to be the UK's largest and most respected financial claims management business winning over 98,000 claims on behalf of consumers and securing more than £180 million in compensation.
What difference did we make?
Catalyst was introduced to the owners of EMCAS late in 2009 following a protracted and unsuccessful sale process. The owners were uncertain of how to achieve their objective of selling the business to management and, in the process, raise external finance.
Following an initial period of assessment, Catalyst facilitated agreement of a deal acceptable to all parties and was appointed to act as lead advisor on the deal.
Catalyst was then able to identify a shortlist of potential funders who would want to support the opportunity and structure a transaction in the absence of any bank funding being available to businesses in this sector.
Lonsdale Capital Partners were selected as the preferred equity provider and have invested for a majority stake in the business. This allowed the management team to participate in the equity and for the existing shareholders to retain a minority stake and receive proceeds from the transaction in a highly tax efficient manner.
The key to delivering this transaction was the up front investment of time committed to the business planning process. This included the use of high quality commercial diligence early in the process to demonstrate the market leadership and potential of the business.
Ultimately, the successful articulation of the strategic plan to ensure longevity of the business model and to broaden exit options in the future was crucial to the delivery of the equity funding.
