Global Container and Equipment Specialist Cargostore Worldwide Secure Secondary Management Buyout with Revolving Credit Facility
New credit facility enables Cargostore to support large scale projects in offshore energy, oil & gas, stability and international aid.
Cargostore Worldwide Trading Limited, global supplier of DNV and ISO containers and specialist equipment announced that it has entered a secondary management buyout (MBO) with private equity firm Connection Capital.
The transaction sees the Management team led by CEO Justin Farrington Smith reinvesting alongside Connection Capital’s clients. The investment, coupled with new debt finance facilities provided by DunPort Capital Management, will provide Cargostore with significant capital to fund the next phase of the company’s growth plans. Cargostore’s current private equity backer, Agathos, will also retain a minority stake.
Cargostore will have enhanced financial flexibility and the ability to invest in new equipment to meet demand for large scale projects the offshore wind power, oil & gas, international aid and defence markets.
Established in 1993, Cargostore provides specialist transport and storage container equipment for hire or sale worldwide. Based in London, UK, it has 30 strategically positioned storage facilities and depot locations around the world to service its diversified blue-chip international customer base.
Cargostore: Ahead of the curve
Further growth is set to be driven both by the rapid expansion of global offshore wind power installations and by favourable changes to regulatory requirements for offshore containers to be of the highest DNV certification. Cargostore is ahead of the curve: it has the world’s largest fleet of offshore DNV 2.7-1 certified refrigerated containers, meaning it is well placed to support new projects and meet specialist customer requirements.
Cargostore has an excellent reputation in the industry for its customer service-focused business model. This has enabled the company to perform strongly in recent years.
Bernard Dale, Head of Private Equity at Connection Capital says, “This investment is an exciting addition to our portfolio and is the 15th MBO that we have backed.” Cargostore is a market leader in a fast-growing niche offering attractive returns on capital, with significant room for further growth thanks both to the increasing emphasis on offshore wind power in global energy policy, and favourable regulatory drivers that play to its offering.”
“As a well-run, geographically diversified operator, it is in an excellent position to deliver on these opportunities, so we are delighted to ensure that the business has ample capital for capex-led growth. Overall, we consider that this asset-backed MBO investment provides very good returns potential as the company gains scale, while affording our clients portfolio diversification into overseas markets, but with UK-based leadership. Our intention is to support the further expansion with investment in specialist container assets across the globe.”
Justin Farrington-Smith, CEO of Cargostore says, “Connection Capital’s investment will be instrumental in enabling us to consolidate our competitive advantage and leverage favourable market dynamics to deliver our future growth plans. With a healthy pipeline of new business opportunities for 2020, building on a core base of long-standing customer relationships, it’s a great position to be in as we enter this new decade.”
William de Laszlo, Founding Partner of Agathos commented, “Cargostore has performed very strongly since our original MBO three years ago. We are delighted to be retaining a stake in the business and being part of its next phase of growth under the stewardship of Management and Connection Capital.”
Debt facilities for the transaction and for expansion capital investment were provided by DunPort Capital Management.
Cargostore’s shareholders were advised by DC Advisory, DMH Stallard, BDO, PwC and CIL. Connection Capital was advised by Gateley, KPMG, Grant Thornton and Marsh. Cargostore’s management was advised by Browne Jacobsen.
About Cargostore Worldwide:
Cargostore is one of the world’s fastest growing suppliers of ISO shipping containers and DNV 2.7-1 certified CCU’s for on and offshore projects. With offices in London and Abu Dhabi and depots across the globe, Cargostore prides itself on providing a seamless and fast service with the flexibility to meet any client requirement.
Cargostore’s Intermodal Division supplies ISO certified storage and shipping containers for lease or sale and can offer bespoke container conversions and specialised equipment. The company supplies projects in stability, mining, aid, community development, large scale sporting events and general logistics.
The Offshore Division provides a complete range of Cargo Carrying Units (CCU’s) to service the oil, gas and offshore renewables industries, project movers and offshore supply companies. All equipment is designed, built and certified to DNV 2.7‐1 standard. The company has invested in a wide range of offshore CCUs and these are available via their location network in the US Gulf, the North Sea, the Arabian Gulf, Middle East, and East and West Africa.
About Connection Capital:
Connection Capital LLP is a Financial Conduct Authority authorised and regulated, specialist syndicator of investment funds from private professional investors into direct private equity, private debt and commercial property deals, as well as alternative asset funds. It currently has some £285 million of funds under management (as at September 2019) across a diverse portfolio, including investments in Virgin Wines and property tenanted by Travis Perkins and Premier Inn.
Connection Capital provides a specialist managed service to help professional clients build up their own alternative asset portfolios. Private investors self-select which opportunities they want to take a stake in. Opportunities are identified and negotiated by Connection Capital, which also carries out all due diligence and manages the investment from completion through to exit, on its clients’ behalf.
About DunPort Capital Management:
DunPort is an Irish owned and managed asset management company focused on the private debt asset class. DunPort, through Elm Corporate Credit DAC (its €285m direct lending platform), provides flexible debt and hybrid capital solutions for SMEs and mid-sized corporates across Ireland and the UK. The DunPort team have been providing flexible capital solutions to mid-sized companies since 2013 and during this time have deployed over €500m in support of a diverse array companies across in excess of 45 unique transactions.