Target Information

Equistone Partners Europe and SL Capital Partners have successfully divested their stake in Together, a specialist lender formerly known as Jerrold Holdings Limited, for approximately £288 million, along with additional proceeds accrued throughout the investment period. Founded in 1974, Together has grown to become a prominent provider of financial services in the UK, offering a diverse range of short-term finance solutions, including auction finance, residential and commercial mortgages, and secured loans.

The company, headquartered in Cheshire, has demonstrated impressive growth over its investment period, significantly enhancing its loan book to over £1.8 billion, reflecting a substantial increase of 26.5%. This growth has been fueled by the development of a highly skilled management team and the strategic addition of a distinguished non-executive board, enabling the company to thrive in a competitive financial landscape.

Industry Overview

In the United Kingdom, the financial services sector encompasses a diverse range of industries, including banking, insurance, and asset management. The industry has shown resilience and adaptability in recent years, responding effectively to regulatory changes and evolving consumer demands. The specialist lending market, particularly, has flourished due to the increased demand for tailored financial solutions that traditional banks may not provide.

The UK has seen a rising trend in short-term finance and alternative lending options, driven by the growing number of consumers and businesses seeking flexible financing solutions. Moreover, low interest rates have led to increased borrowing, boosting the activity in mortgage and secured loans segments. This trend indicates a lucrative market for companies like Together that specialize in meeting specific financial needs.

Furthermore, the fintech revolution has reshaped the landscape by introducing new technological advancements that improve efficiency and customer experience. The integration of technology in lending processes allows companies to streamline operations, enhance underwriting practices, and provide faster access to funds, thereby strengthening their competitive edge.

As of mid-2016, Together has positioned itself strategically within this evolving industry, leveraging its strong performance and significant loan book to capture market share and expand its service offerings. This adaptability ensures that the company remains well-poised to face future challenges and capitalize on market opportunities.

Rationale Behind the Deal

The sale of Equistone and SL Capital's stake in Together reflects the organization's positive performance and growth trajectory during their investment tenure. The strategic decision to sell was influenced by Together's robust financial results, characterized by record pre-tax profits of £90.3 million and a burgeoning loan book value. As the market for specialized lending continues to expand, the opportunity for liquidity aligned well with the investors' objectives.

With a solid foundation and operational upgrades in place, Together is well-positioned for sustained future growth. The founders' repurchase of the stake further indicates their commitment to the company and confidence in its long-term prospects, making this an opportune moment for Equistone and SL Capital to exit.

Investor Information

Equistone Partners Europe is a leading mid-market private equity firm with a strong track record of investment across various sectors, including financial services. With considerable experience and a commitment to fostering business growth, Equistone aims to support its portfolio companies by providing strategic guidance and operational expertise.

SL Capital Partners specializes in private equity investment and has been a supportive partner to Together since its inception. The firm focuses on generating superior returns for its investors by partnering with well-performing businesses that demonstrate strong management and sound financial strategies, and Together has exemplified this philosophy throughout their investment relationship.

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The sale of the stake in Together by Equistone and SL Capital can be characterized as a strategically sound investment decision. The significant growth the company has experienced, coupled with its robust management team, validates the investors' initial commitment. Furthermore, the decision to exit allows Equistone and SL Capital to realize their returns while the company continues its upward trajectory.

Considering the ongoing expansion in the UK specialist lending sector, investing in Together represents a compelling opportunity for future stakeholders. The company has exhibited resilience and capacity for innovation in its services, positioning it favorably within a growing market. Future investors can benefit from Together's established reputation and thorough understanding of the financial landscape.

Overall, the long-term partnership between Together and its investors has proven fruitful, and the firm’s ongoing investment in operations and talent acquisition underscores its potential for continued success. Overall, this exit strategy reflects positively on both Equistone and SL Capital, affirming their foresight in selecting a high-potential investment opportunity.

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