The £2.5 billion bank-backed Business Growth Fund (BGF) has closed its first July deal through the backing of York Mailing.
The York-based company produces retail flyers, media inserts and catalogues and turned over £75 million with a profit of £7.6 million for the year ending May 2013.
For the second time in a row, the BGF has invested £10 million into a business – making it the fourth time the fund has invested eight figures following deals involving Better Bathrooms, Broadbandchoices.co.uk and GCI Com.
BGF’s equity investment, which has given it a minority stake, will be used with additional funds from asset-based lending and cash facilities to fund new ‘state-of-the-art’ printing presses to improve with efficiency and volume capacity.
Chris Ingram, CEO and founder of York Mailing, says that the Northern business has grown organically and through acquisitions since 1999.
He adds,’ Our investment in the new printing presses will add significant technological capabilities to the group and will mean that we are able to offer new and existing clients an unrivalled offering in the promotional printing market.
‘Any expansion programme requires a level of financial flexibility and we needed an additional partner who could support us in this effort by providing not only the requisite growth capital, but who would work alongside us as a partner over the long term.’
Selection of Business Growth Fund deals:
- BGF makes maiden investment in Benefax
- Youngest company to date backed by BGF
- BGF enters Wales with SHS deal
- Wear Inns uses NVM and BGF cash to acquire pubs
- Wow! Stuff gets £4.8 million to play with
York Mailing says that its future growth will be driven by a trend which has seen the retail flyer and brochure market buck a trend which has meant challenges for books, magazines and newspapers.
The business is comprised of two web offset printing companies, York Mailing and Pindar Scarborough, and has clients including Marks & Spencer, Tesco, Lidl and The White Company.
Richard Taylor, senior investment manager at BGF, comments, ‘What has impressed us with Chris, Mike and the wider team at York Mailing was their ability to build a profitable and growing company by targeting a niche area within the sector which is in demand and expanding rapidly.
‘Consistently investing in the latest innovative printing technology and acquiring underperforming assets and turning them round has enabled the management team to secure a market-leading position.’
See also: Our exclusive Business Growth Fund roundtable:
- Taking on capital for acquisitions
- Marketing and new hires for companies after backing
- Capital expenditure for businesses post-investment
- Building out new products
- Video: Deciding when and how to take on backing
- Video: How acquisitions can accelerate growth
- The Business Growth Fund: Two years in numbers
- Stephen Welton: Entrepreneurs, don’t be afraid to ask for help