Software Circle in shape for more M&A following funding boost
Mon, 16 Dec 2024 | BUSINESS NEWS
Software investor Software Circle has secured a £16.7 million loan facility from Shawbrook to drive future M&A opportunities.
The Manchester-based vertical market software acquirer has already completed seven acquisitions across the UK and Ireland since it was founded 20 years ago.
Software Circle started its buy and build programme in 2022 with an aim to expand its portfolio and product offering while enabling business owners to fulfil their exit strategies. Its strategy is to keep the independent operational set-up, management teams, entrepreneurial spirit and culture of each business it acquires.
Focused on progressing its acquisition plans, Software Circle was looking to simplify its capital structure and provide further cash for M&A opportunities in the future.
Shawbrook completed an in-depth assessment of these long-term objectives and structured a two part solution incorporating a commercial loan and a committed acquisition facility to facilitate the bond redemption and provide that additional funding for future buys.
Gavin Cockerill, CEO of Software Circle, said the company has a ‘healthy’ M&A pipeline. "We intend to deploy our currently available capital before utilising the debt facility which further extends our financial runway, enabling us to pursue additional M&A opportunities,” he added. “We are committed to maintaining our disciplined approach to acquisitions, ensuring that each addition is aligned with our culture, enhances our overall value proposition, supports our long-term objectives including our primary financial goal of maximising operating cash flow per share."
Tony Dean, Senior Director at Shawbrook, said: “The Deal Team took significant time to truly understand the overall objectives of the business and ongoing acquisition strategy. I like to think that this approach and our own team’s expertise enabled us to structure a solution that will provide the flexibility and certainty for the business to continue to deliver on their growth ambitions”.
Pinsent Masons acted as legal counsel and MHA conducted financial due diligence for Shawbrook.
The software M&A market has powered forward this year with surveys suggesting that deal volume could grow by a fifth on 2023. Companies looking to boost their digital capabilities and enter new markets have been big drivers of this growth.
Find out more about why dealmakers are feeling optimistic
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