THE CONSULTING CONSORTIUM
UK’s largest independent regulatory consultancy set to expand with BGF investment
In March 2014, BGF invested £10m for a minority stake in The Consulting Consortium (“TCC”), the UK’s largest independent regulatory and compliance consultancy.
Headquartered in London with an office in Leeds, TCC provides specialist regulatory compliance services to FCA regulated firms in the financial industry. TCC has advised over 250 financial services clients since 2001, more than 140 in the last two years including a number of FTSE 100 and multi-national companies.
Entrepreneur Joanne Smith founded TCC in 2000. With over 20 years’ experience in the financial services industry, she began her career at the Financial Services Authority (FSA) before becoming a regulatory consultant for KPMG. In establishing TCC, Joanne sought to build a consultancy business that would provide a very different style of service to that of the traditional ‘Big Four’ firms. In what is still a typically male dominated industry, females account for over half of TCC’s staff and Joanne has been credited with a number of awards for her contribution to the industry.
TCC has experienced impressive growth over the last few years and in December 2013, TCC was ranked in 45th place on the 2013 Sunday Times Virgin Fast Track 100. Its turnover in the current financial year is approaching £12m.
BGF’s growth capital investment will focus on building the firm’s marketing, personnel and infrastructure. TCC is expected to grow revenues on the back of an increasingly active FCA and through capturing market share. The value of regulatory actions brought by the FSA/FCA during 2013 revealed that fines reached a record annual total of over £472 million (source: Freshfields Bruckhaus Deringer).
TCC has developed a ground-breaking proprietary risk management SaaS solution called RecordSure that monitors, records and analyses near real-time interactions between financial product sellers and customers to provide transparency, consistent reporting and compliance tools to address issues of mis-selling or other regulatory breaches.
Joanne Smith, founder and Chief Executive of TCC commented:
“BGF will provide valuable guidance and contribution in taking our company to the next level of growth. Given the ever changing regulatory environment, with financial services companies needing to remain compliant at all times with FCA regulations, our services are increasingly in demand.
“We have delivered impressive year on year growth without any institutional funding to date, but we wanted the right investment partner to help take the business to the next level. BGF stood out for us because their bank shareholders are the exactly the type of companies that we want to work for. They bring so much more than money to the equation in terms of expertise and a huge network of relevant contacts that we can access.”
Marion Bernard of BGF, commented:
“Our investment in TCC is a very exciting opportunity for BGF. The company has demonstrated its ability to deliver complex regulatory solutions and advice to major financial and consumer companies across the UK. The increased focus on maintaining high regulatory standards following a number of high profile incidents in the financial services industry over the past few years highlights the need for TCC’s expertise.
“We were also particularly excited by the new software product RecordSure, which has the potential to revolutionise the manner in which companies approach and monitor regulatory activity within their firms. We are delighted to be backing Joanne and the team, who are genuine experts in their field.”
Marion Bernard, BGF Regional Director for London and South East, joined the board on behalf of BGF.
BGF backs largest supplier of print to the UK retail sector with £10 million
York Mailing Limited is the UK market leader in the specialist production of retail flyers, media inserts and quality catalogues.
The group comprises of two web offset printing companies: York Mailing Limited, which specialises in the production of retail flyers and media inserts; and Pindar Scarborough Limited, which specialises in the production of high quality catalogues, principally for the online retail market. York Mailing’s customers include some of the UK’s largest and best-known supermarket and retail brands including Marks & Spencer, Tesco, Lidl, Iceland, The White Company, Cotton Traders and Boden. York Mailing generated turnover of £75m and profit of £7.6m in the year ended May 2013.
BGF invested £10m of growth capital in the company and took a minority stake. BGF’s investment, together with additional funds from asset based lending and existing cash facilities, will enable York Mailing to fund the process of investing in new state of the art printing presses, which will provide significant additional volume capacity and efficiency improvements. The funding from BGF will also provide the financial means for opportunistic acquisitions and investments in the future.
Based in Elvington near York, York Mailing was founded by Chris Ingram in 1999. It is managed by Chris Ingram, CEO, and Mike Newbould, COO. They have since grown the business organically and through the acquisition of niche print specialists, including Pindar Limited in 2011, to become the largest supplier of print to the UK retail sector. The business has also won a number of accolades including being ranked as one of the UK’s private companies with the fastest growing international sales in the Sunday Times Virgin International Track 200 in 2013; and named as Printing Company of the Year by Print Week in 2008.
Despite the challenges of the market with books, magazines, newspapers and advertising moving online, the retail flyer and brochure markets, in which York Mailing has developed a leading position, are performing strongly. This is driven by supermarkets using flyers and media inserts as part of their marketing strategies and retailers using high quality brochures as a key conduit to drive online traffic.
Richard Taylor, BGF, commented:
“I think that many people would look at the physical printing business with some trepidation given how much of the market is moving online. What 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 that 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. It’s a great example of a proven and dynamic management team with a clear plan to grow their business.
“You really only have to look at York Mailing’s excellent and long-standing client base to gain an understanding of company’s capability in delivering high quality printing campaigns and we look forward to supporting the company in these exciting times of growth and expansion.”
“With our recently established office in Leeds, we now have an even stronger local presence in Yorkshire and the North East; and York Mailing is the seventh investment that BGF has made in the North of England over the past sixteen months. We urge businesses to come and talk to us and see how our approach to partnership investing might also help them.”
Chris Ingram, Chief Executive Officer of York Mailing, commented:
“Since 1999 we have grown our business organically and through strategic acquisitions. 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. BGF offered us this relationship and we look forward to working with them in the future.”
Cennox was founded in 2004 by Clive Nation as a specialist ATM services group and has been successfully built up through organic growth and acquisition to comprise of two main businesses: ATM Parts and Mainet. Blue chip customers include Barclays, HSBC, Nationwide, IBM, Bank Machine, Loomis and G4S.
ATM Parts is a leading international supplier of parts for ATMs and has developed and patented a security device that combats skimming from payment terminals. The anti-skimming device is attached to ATMs and terminals and works by detecting a range of fraudulent activities and reporting the threat level to the ATM operator and to financial institutions. This innovative security device is used by a number of international banks. Mainet supplies ATM signage, installation and facilities management services and is the UK’s leading ATM branding company.
BGF’s initial £3m equity investment in June 2012 enabled the Cennox group to fund working capital, invest in additional staff and ramp up its international operations. BGF has supported management in its plans to grow the business both in the UK and overseas.
BGF has since invested a further £2m to part fund the acquisition of US-based Sterling Group Inc in December 2013 which in turn acquired PSSI International Inc, a southern California-based company. The purchases significantly boosted Cennox’s US presence.
Cennox is headquartered in Camberley, Surrey and has several offices across the UK and US.
BGF has a minority stake in the business and a representative on Cennox’s board.
Statesman acquires Commodore International Travel
Statesman Travel Group have announced that it has acquired Commodore International Travel.
The combined entity will trade as Statesman Travel, with Commodore’s Masterfare remaining a distinct and separate brand. London remains the major centre for the business supported by its regional office in Manchester. The enlarged group will become a ‘top 10’ UK travel management company in terms of transactional volume, with revenues of circa £100 million and a staff of 150 people.
The Business Growth Fund (BGF), which has been established to invest in Britain’s fast growing smaller and medium sized businesses, has supported this acquisition. It will take a minority stake in Statesman and will sit on the board alongside the current management team, led by Mervyn Williamson and Jon Langley.
Statesman is known for its high levels of service and for seeking out and applying innovative solutions to set the industry standard in delivery. In tough market conditions, Statesman has increased sales by well over 50% since its acquisition in July 2007. This has been achieved through working in close partnership with its blue chip customer base, which includes strong representation from the financial services, professional services, property and media sectors.
Jon Langley, Joint Managing Director of Statesman Travel, commented:
“This investment and acquisition is fantastic news for both businesses, as well as our clients and staff. Commodore Travel is a well-established business with whom Statesman has much in common. We believe that there is a strong rationale for combining our strengths, both optimising the service that we offer our existing clients and expanding our capabilities to meet the needs of multi-national companies in the future. Together we can be a potent force in the travel management sector.”
Mervyn Williamson, Joint Managing Director of Statesman Travel, commented:
“We are committed to ensuring continuity and will be harnessing the benefits of the enlarged group for our clients. Customer service remains absolutely key to what we do.
This is a critical next step in Statesman’s ongoing growth and in the BGF we have a partner investor who will actively support this. In addition to funding, they provide expertise and high level contacts; they will sit on our board and will bring an edge to the business – all of which will be of great benefit to Statesman and our clients.”
In October 2011 BGF invested £4.25m in Statesman Travel Group (Statesman), an independent travel management company providing a comprehensive service to blue chip corporate and private clients.
The BGF investment, together with additional funds from existing shareholders and support from Lloyds Banking Group, funded the strategic acquisition of Commodore Travel (Commodore) and helped to create one of the top 10 UK travel management companies in terms of transactional volume, with revenues approaching £100m.
Statesman was acquired in 2007 by its current management team, Joint Managing Directors Mervyn Williamson and Jon Langley, both of whom have had significant experience in the travel sector and led the management buyout of Phoenix Travel Group, together with its subsequent sale to TQ3 Travel Solutions in 2003. Non Executive Director Eric Brannan is an experienced travel industry veteran, having held senior roles at American Express and Hogg Robinson, and has worked closely with the management team since 2001.
In December 2014, Statesman appointed Drew Thomson to the board as Non-Executive Chairman. Drew is the former Chief Executive of Airmiles and BA Miles, and was the founder and former Chief Executive of Starcount, the social analytics company which uses mathematics to track the tastes and trends of 1.7bn people and 126,500 celebrities across 12 major social media networks. Drew was also Executive Chairman of Iris Worldwide, a digital media agency, where he led the development and international growth of the Iris group business.
The company has a blue chip customer base with strong representation from the financial services, professional services, property and media sectors. The business has also made significant progress recently in securing more professional service firms as clients with companies including an international accountancy firm who are now using Statesman’s new travel management application.
In July 2015, Statesman also acquired air fare consolidator Greaves Travel and merged into its Masterfare division to expand market share on popular routes to India, Africa, south-east Asia and Australia with British Airways and other leading carriers.