Growth Fund - Loans & Equity Case Study

Back, L‑R: Badgequo’s Erwin Kist, Finance Yorkshire’s Ash Chopra, RM Corporate’s Phil Bailey, Gordons’ James Fawcett and Finance Yorkshire’s Grahame Lunt, with (front L‑R) Badgequo’s Linda Arter, Rebecca Whitehouse of Walker Morris (centre) and Badgequo’s Kai Arter

The Company

Badgequo has been trading for more than 25 years, during which time the company has developed a wide range of cosmetic and toiletry products which combine affordability and quality.

The company designs and manufactures a wide range of branded gift sets and private label products for major high street retailers.

The Silsden-based company was bought out by Kai and wife Linda in June 2006. Badgequo has subsequently grown from seven employees, 70 customers and a turnover of just under £5m to 24 staff, 250 customers and a turnover of £7.7m.

Badgequo products have also been exported to countries including France, Italy, the Czech Republic and Norway.

The Challenge

Badgequo’s business can often be quite seasonal – for example Christmas presents or Mother’s Day gift sets.

Managing Director Kai Arter said: “We were looking for a different structure and approach to funding and felt Finance Yorkshire would offer us just that and it has been a very smooth, open and straight-forward process from application to completion.”

The Solution

The Finance Yorkshire deal has seen Badgequo receiving an investment totalling £900,000 - made up of a £800,000 equity investment, led by Investment Director Ash Chopra, and a £100,000 business loan, by Investment Manager Grahame Lunt.

A strong professional team was put in place to secure the £900,000 investment deal including Phil Bailey from RM Corporate who acted as lead adviser to Badgequo, and lawyers James Fawcett and Jonathan Asquez of Gordons, who advised Badgequo, and Peter Considine and Rebecca Whitehouse of Walker Morris for Finance Yorkshire.

Said Kai Arter: “The combination of equity and business loans from Finance Yorkshire ensures we have the flexibility we need.”

The Investment Rationale

The mix of equity investment and business loan from Finance Yorkshire meant the team were able to work to the timescales dictated by Badgequo’s seasonal funding requirements.

Alex McWhirter, Chief Executive of Finance Yorkshire said: “This is a landmark deal for Finance Yorkshire as it demonstrates how the investment teams can work together to provide flexible finance packages to suit the needs of businesses across Yorkshire and the Humber.”

Future Expectations

Said Kai: “The investment from Finance Yorkshire will be used to develop and grow our business, predominantly in the UK as well as Europe.

“We expect to take on additional people at our Yorkshire headquarters in product development to help us drive forward our plans.”

Note: this case study is from Finance Yorkshire’s previous fund. Read more about Finance Yorkshire

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