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Musings on corporate finance, fund raising, capital markets and other matters

£6 million Growth Capital Facility, Progress to Excellence

In May 2018, Altimapa successfully secured a 5-year interest-only growth capital loan for Progress to Excellence and its owner a2e Industries. This capital was used to fund a pipeline of acquisitions and to allow the management team to increase its stake in the business.

Company Background

Progress to Excellence is a provider of apprenticeship training, vocational courses and special needs school services. With over 20 years of experience, they operate across a range of sectors and geographies. Due to the introduction of the apprenticeship levy and an increased supply of advanced learner loans, they have recently experienced strong growth. a2e Industries is long-term value investor with a hands-on approach. They target businesses in special situations and work with the management to develop a shared strategic vision. a2e invested in Progress to Excellence in August 2015.

Acquisition Strategy

Progress to Excellence has shown remarkable organic growth in its specialized sectors that include healthcare, social care, and business training. Through their own historic success, they have come to realize that the best way to enter a new sector is through acquisition. With a pipeline of potential acquisitions and a rapidly growing market, they sought to partner with the right finance provider to exploit this market opportunity.

The Private Debt Solution

Altimapa worked with Progress to Excellence and engaged with a select number of lenders. Two executable and competitive offers were provided to the company within 6 weeks of the start of the fundraise. An interest-only loan (often called a “bullet loan”) suited the company best as it would allow the acquisitions to pay for themselves over a period of time without restricting cash flow. Despite unexpected changes in the apprenticeship landscape and its temporary impact on the business, Altimapa guided and assisted Progress to Excellence and a2e Industries throughout the process to secure the full facility.

Summary Terms

Amount Undisclosed
Tenor 5 Years
Type Bullet Loan
Uses of Cash Fund pipeline of acquisitions and provide a cash-out for equity investors