Becoming One of the Family
Business: CorrBoard UK Ltd
Funding: £5.5 million
Turnover: £30 million
In the search for efficiencies, businesses are increasingly built on partnerships and collaboration. In the case of CorrBoard UK Ltd, it was a partnership of eight businesses that rallied round to set up the manufacturer of corrugated cardboard.
Established in October 2013, with manufacturing beginning in July 2014, the venture has gone from strength-to-strength with turnover now at £30 million. However, to allow the business to grow further, CorrBoard UK Ltd needed a new partner to join their family.
CorrBoard required working capital, which would enable the business to scale-up. It was at this point, the business turned Bibby Financial Services’ Corporate Finance team who provided an Invoice Discounting package of £5.5m.
Commenting on the growth of the business and the need for additional funding, Nick Kirby, consortium member and Chairman of CorrBoard said:
“From the start of the CorrBoard business, we have been focused on looking forward to the next stage of its growth. Earlier this year we recognised that to meet future demands in and of our business, additional funding was needed to allow us to unpack the business’s potential.
“We needed a corporate financier that could offer both experience and flexibility in structuring a package that works for us, both now and in the future, and this is why we chose to partner with Bibby Financial Services.
“We have worked very closely with the team at BFS and we now have an Invoice Discounting facility in place that will flex as our ambitions and targets grow.”
At its facility in Scunthorpe, CorrBoard UK Ltd has a team of 80 producing its range of products. With a new, modern state-of-the-art corrugating facility, the business has the capability to manufacture well in excess of three million square meters of product each week; a significant proportion of the UK sheet market.
The manufacturer is owned by seven similarly aligned packaging businesses and their operational partner, US based Corrugated Synergies International. In order to provide funding for the business, BFS needed to understand how the business and the consortium function. Finding a way to fund the core business that is supported by seven of its own ‘customers’ is an unusual challenge but one that Bibby Financial Services did not shy away from.
Commenting on the funding partnership, Andrew Darling, Corporate Manager at BFS said: “CorrBoard UK Ltd is a high potential business with a unique management structure. Configuring an Invoice Discount package of this nature is extremely complex so combining our experience and knowledge of the sector with our relationship-based approach was crucial.
“There were a number of challenges that we had to overcome but the key to making this deal successful was getting under the bonnet of the business and understanding how both it and the consortium work. One particular area that we accommodated was increasing the threshold on the sales ledger that any one of the consortium could make up at any one time.”
Commenting on the benefits that CorrBoard brings to the members of the consortium, Nick Kirby, continued: “For members of the consortium, CorrBoard is a strategically innovative venture that helps our businesses operate more efficiently and with greater control. In the past we would often be under pressure to turn around orders for our customers in two to three days but we would have to wait seven to eight days for our suppliers. With CorrBoard we have been able to cut this down to 24-48 hours, providing a fast and reliable supply into the UK market.
“Having finance in place that matches the flexibility we’ve worked hard to achieve is a powerful position to be in, and it helps us to take advantage of opportunities that otherwise would be tough to convert into orders.”