Case Study

Broadcast equipment rental provider raises debt to leverage MBI/MBO

Brief

Consequent upon the decision of a UK Plc to dispose of a subsidiary, Presteigne Broadcast – a broadcast equipment dry-hire rental organisation, Management and NVM private equity agreed terms to acquire it.

The rental fleet comprising professional television cameras and lighting, was debt free and was used as security to acquisition and working capital.

Work

The key issues in valuing a rental equipment business is not only the market value of the assets but also, as they are off-site and on-hire, to demonstrate their existence.

Our work researched global rental markets, ‘feature creep’ or technical obsolescence, utilisation and the impact of distress in selling the assets of a major fleet operator.

Interrogation of the fleet management system provided an audit trail of the assets from order through to delivery, return and the inspection and repair profile

Outcome

After assisting in negotiation with competitive banks, funding was agreed. A proportion of the fleet that was under utilised was identified and converted to cash to reinvest into new equipment.

Testimonial

Mike Ransome, Presteigne CEO comments: “This buy-out enables us to take advantage of the significant growth opportunities presenting themselves in today’s changing broadcast market.”

David Rolfe, Partner of NVM comments: “Presteigne has a strong platform for growth and NVM are delighted to be able to support Mike and his team with the necessary resources to expand the business as an independent company. Presteigne has a strong client base, quality leadership, and operates across different geographies, sectors and specialist areas of the broadcasting industry.”

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