Truro-based Ignition, a leading UK provider of vehicle and asset finance for SMEs, has helped arrange finance for the acquisition of Exeter logistics company, STR Logistics.
Founded in 2002 by Steven Richardson, STR Logistics has grown to become a well-established delivery, distribution and transport solutions company, working with national companies to deliver goods across Devon, Cornwall and beyond.
Earlier this year, Steven took the decision to sell the company and was approached by prospective buyers, Anthony Quinn and Peter Adams. The pair both held senior roles in logistics for many years, meeting some time ago as colleagues at the international logistics company, Kuehne + Nagel. Keen to relocate to Devon from the home counties and run a business of their own, Anthony and Peter saw that STR Logistics was a sound business with plenty of potential and contacted Ignition for advice on how to raise finance for the purchase.
Ignition identified that the company was rich in assets, with a modern fleet of 70 vehicles that were mostly owned. By arranging the refinancing of these vehicles, a significant amount of capital was released. In addition, an Invoice Finance package was put in place in conjunction with Paragon Bank, to help regulate cash flow. Whenever STR Logistics raises a substantial invoice, it receives 85% of the value in funds within just 36 hours, rather than waiting for the standard four to six weeks for payment to come through. Then once the customer pays in full, STR receives the remaining balance, minus an agreed fee.
Peter Adams comments:
“We were really fortunate to have Ignition’s support throughout the acquisition process. As well as being local to the region, Ignition had an existing relationship with the previous owner having assisted them with asset finance in the past, and also came recommended by a trusted business contact, so we knew we were in good hands. The finance package they put together for us works really well for everyone involved and has ensured we have the funds we need to further invest in and expand the business.”
The future certainly looks bright for STR, with the national logistics sector booming in the fall out of the Covid 19 crisis, as Anthony Quinn explains:
“The logistics and deliveries sector was already enjoying significant growth, but has experienced a substantial boost since Covid 19. Online sales are soaring, and retailers have re-evaluated their supply chains in an effort to make them shorter and therefore more resilient to the effects of the global pandemic. STR is ideally placed to offer a workable solution, and as a company operating solely within the UK, we won’t be faced with any of the cross-border challenges emerging as a result of Brexit.”
Anthony and Peter see an opportunity to expand STR’s core region, offering a ‘Gateway to the South West’ to include Gloucestershire, Bristol and South Wales as well as the original heartland of Devon and Cornwall. They have taken on all 102 existing staff and plan to double the size of the business within 5 years.
Paul Caunter, Managing Director at Ignition comments:
“This was a complex acquisition which required a bespoke finance package to ensure a smooth transition. Thankfully we were able to find a combination of solutions to suit the specific circumstances, to the benefit of everyone involved. I have no doubt STR Logistics will continue to thrive under Ant and Peter’s leadership and look forward to seeing their plans come to fruition.”