A Hampshire-headquartered fire and security firm has secured a £20m royalty financing deal, which it has already used to complete a pair of acquisitions. Moore Barlow worked on the deal.
Based in Southampton, New Path Fire and Security is a family of regional fire safety and security companies. It covers all aspects of fire safety, including the installation, maintenance and servicing of fire alarms, fire doors, fire stopping, extinguishers and emergency lighting.
The 30-year deal with Duke Royalty included an initial £5m total capital investment to refinance New Path’s existing lender, fund two immediate acquisitions and a commitment to a further £15m to support the company’s buy-and-build programme.
Its two acquisitions were completed just before the end of 2022 and saw the group buy Marlow-based Bourne End & Henley Security Systems Ltd and Aran Fire Protection in Suffolk.
Royalty financing is an alternative to standard debt or private equity financing where the financial provider enters a long-term capital partnership with the business and allows the owners to maintain control and removes re-financing risk.
Mark Pihlens, director at New Path Fire & Security, said: “This is a landmark set of deals for our business, which expands both the geographical and service capabilities of our group.
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“Accessing an innovative form of financing through Duke Royalty is exactly the financial partnership we need to continue acquiring and growing at the rate we’ve maintained over the past couple of years.
“Our ambition is to keep welcoming like-minded fire and security businesses into our family, building financial resilience for all members of the group and further bolstering the breadth of our offering to customers.”
He added: “Every transaction presents a new legal challenge, and we really value the experience and versatility the team at Moore Barlow bring to the table every time. Having the right advisors by our side has been crucial as we have gone through the financing process.”
Moore Barlow has advised New Path on nine transactions in two years as the firm pursues its ambitious buy-and-build growth strategy.
Kirsty Leary, corporate partner at Moore Barlow, said: “It’s so gratifying to help a long-standing client realise their ambitions for growth. New Path is creating a formidable group of businesses across the South of England, offering an array of security and fire services that is rarely accessible under one roof.
“New Path’s willingness to be versatile and explore newer forms of funding is a lesson for SMEs out there who think external investment is beyond their reach. There are other options for an acquisitive business aside from private equity or debt financing.”
This article was originally published in Insider Media Ltd, on 5 January 2023.