Beechbrook Capital has made two debt deals from its Private Debt III fund (PDF III). Both financings are being utilised by private equity managers in the buy-outs of UK-based companies.
The first deal supports the buy-out of UK merchandise company Brand Addition by Elysian Capital. Beechbrook has backed the company before – supporting its acquisition by HIG Capital in 2012.
“We were interested in staying involved,” Nick Fenn, co-founder of Beechbrook, told PDI. Beechbrook has provided mezzanine financing on this occasion with HSBC being the senior lender, Fenn said. HSBC also served as the senior lender when Brand Addition was acquired in 2012.
Beechbrook is also providing mezzanine financing to support the buy-out of recruitment firm Search Consultancy. While the recruiter is new to Beechbrook, Fenn noted the investor has provided financing to recruitment firms in the past.
Search Consultancy is being acquired by H2 Equity Partners, an investor Beechbrook has also worked with in the past, Fenn said.
Further terms of the deals could not be determined by time of publication. Fenn did note, however, the deals fall into the typical range for PDF III, which tends to provide financing between approximately €5 million and €10 million.
Both deals involve an equity investment alongside the mezzanine financing. “We always like to take some upside exposure in our investments,” said Fenn, noting this could come in the way of an equity kicker or warrants attached to the debt.
PDF III has now made five investments with €42.6 million of capital deployed. As of its latest close, the fund had €126 million raised in committed capital. Fenn said the firm anticipates the fund will hold a final close during the summer. According to PDI data, the fund has a target of €200 million.