Law firm Moore Barlow’s corporate team has advised New Path Fire and Security on a new royalty financing deal as the fire and security services group pursues an ambitious buy-and-build growth strategy.
The 30-year financing deal with royalty finance provider Duke Royalty is worth £20m to the Hampshire headquartered fire and security firm. The deal 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 future buy-and-build programme.
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.
The two acquisitions were completed just before the end of 2022 and will strengthen and expand New Path’s geographical service capabilities in the M4/M40 corridor with Marlow-based security specialist Bourne End & Henley Security Systems Ltd.
The acquisition of Suffolk-based Aran Fire Protection Ltd expands the group’s service offering into the passive fire sector adding fire door installation and fire-stopping capabilities.
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. 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.
“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.”
Headquartered in Southampton, New Path Fire and Security is a family of regional fire safety and security companies. The group covers all aspects of fire safety, including the installation, maintenance and servicing of fire alarms, fire doors, fire stopping, extinguishers and emergency lighting, in addition to security solutions through CCTV, access control, intruder alarms and door entry systems.
The 22-strong corporate team at Moore Barlow is one of the largest in the South of England. With offices in Guildford, Southampton, Lymington, Woking, Richmond and London, the team supports clients in London and along the M3 corridor, and the South Coast.
This article was originally published in Business Leader, on 5 January 2023.