29/07/2011

Bespoke investment package lays foundation for cosmetics firm’s further expansion

A tailored funding package from Finance Yorkshire has helped put the gloss on a West Yorkshire cosmetics company’s growth plans.

The deal with Finance Yorkshire 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.

Managing Director Kai Arter said: “Our business can often be quite seasonal – for example Christmas presents or Mother’s Day gift sets – but the combination of equity and business loans from Finance Yorkshire ensures we have the flexibility we need.

“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.”

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.

“Since the buyout, Badgequo’s supply chain has expanded and we’ve invested in sales, new product development, regulatory compliance and IT,” 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.”

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. We look forward to completing more of these types of deals in the future”

Finance Yorkshire Investment Director Ash Chopra said: “Kai and Linda Arter have demonstrated exceptional business and commercial acumen by bringing from their previous roles, a plc mentality of strong financial controls and efficient operational processes which has been combined with the responsiveness, direct customer interaction and short decision making lines that are typical of a well run owner managed business.”

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.

Phil Bailey said: “Finance Yorkshire’s pragmatic and professional approach suited all involved and the team were able to work to the timescales dictated by Badgequo’s seasonal funding requirements.

“We are very pleased to have helped Kai and Linda with this important phase of Badgequo’s development.”

Finance Yorkshire has invested £9 million in companies throughout Yorkshire and the Humber, levering £3.40 to every £1 invested generating approximately £27m in additional private sector leverage.

Helping a range of small and medium sized businesses to meet their funding requirements for growth and development, Finance Yorkshire provides seedcorn, loan and equity linked investments, ranging from £15,000 to £2m.

The project is supported financially by the European Union. It has attracted £30million investment from the European Regional Development Fund (ERDF) as part of Europe’s support for the region’s economic development through the Yorkshire and Humber ERDF Programme, £15million from Yorkshire Forward’s Single Programme, and £45million match funding from the European Investment Bank.

For more information about Finance Yorkshire, please visit www.finance-yorkshire.com or ring 0845 649 0000.