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Safe as houses

Thursday, 26 October 2006

Michael Fahy seeks to find out why Barclays Private Equity was so taken with a 30-odd year-old laonds firm. Henry Moser, one of the co-founders of Manchester-based secured loans company Jerrold Holdings, has waited an awfully long time to decide that he needs investment to help grow the business – 33 years, in fact.
However, hanging on for such a long time means that he’s been able to secure a very nice price for any equity he’s given away. Last month, Barclays Private Equity’s Manchester office wrote out its biggest investment cheque to date, paying £113.5 million for what is described as a “significant minority stake”.

The exact amount wasn’t disclosed, but EN believes it to be around a third of the business, which would give Jerrold a total value of around £340 million – although we’re pretty sure someone will correct us if that isn’t the case.
Whatever, the principal reason for the deal wasn’t just for Moser (who owned 86 per cent before Barclays’ investment) to cash out, but to set the firm on a transition path towards the next phase in its development.
“It knows where it’s going and we’re delighted to be able to help it get there,” says John Walker, the Barclays director responsible for writing the cheque. Jerrold provides around £600 million a year in secured loans through subsidiaries such as Blemain, Cheshire and Lancashire Mortgage Corporation and Bridging Finance. It loans amounts ranging from £10,000 to £2 million to both personal and commercial customers, and its ability to do deals quickly has won it many fans in the marketplace.
In fact, Barclays Private Equity was initially introduced to the company four years ago with a view to doing a deal which "didn’t work out”, but it was impressed with the team and continued to track the company. Once Jerrold appointed NM Rothschild as corporate finance advisors with a view to raising investment 12 months ago, Barclays remained a frontrunner.
“We were probably favoured because of the relationship we managed to build up over the years, but we still had to be sharp on our toes,” says Walker.
“In those four years since, they’d never failed to meet their sales targets,” Walker continues. Of course, this means Barclays has eventually paid a much higher price for its stake, but Walker seems convinced that Jerrold’s strong growth ill
continue for years. “There aren’t many businesses that we’d be prepared to chase around for four years,” he says.
“But we’ve been constantly impressed by it.” The main reason for this is its “bloody good management”, which is led by finance director Gary Beckett and sales director Marc Goldberg. Both have received equity stakes as a result of this deal.
Jerrold Holdings was advised by NM Rothschild, Deloitte and Eversheds, while DLA and KPMG Corporate Finance advised Barclays.