Walstead seals fresh finance deal with Close

Walstead Group has agreed a new facility with Close Brothers Asset Finance as part of a simplification of financing across the business.

Over the summer the €520m (£448.3m) turnover pan-European print group agreed a sale and HP arrangement with BBVA for two presses at its Iberia business – including the 96pp Goss web installed last year – and has now done something similar at its UK business.

Walstead UK’s new sale and HP back arrangement with Close relates to printing and finishing equipment here, with the proceeds being used to repay an existing secured loan with RBS.

“We’re tidying up our debt structure and have made it more efficient,” explained Walstead Holdings chief financial officer Julian Rothwell.

“We have made a lot of acquisitions and they’ve all come with their own debt. So we’ve looked at the whole group and restructured our financing to put us on an even footing.”

Walstead has dealt with Close since its 2014 purchase of the short-grain web from Global MP, the former St Ives Bradford site; followed by a much bigger deal with the 2016 acquisition of Polestar Bicester’s equipment.

Rothwell said he had been impressed by the Close team’s industry and company-specific knowledge and ability to handle intricate financing requirements.

Jon Bennett, commercial director at Close’s print division, said: “This was a complex transaction involving multiple stakeholders and requiring significant experience of the print sector. This deal is testament to our ability to both understand complicated international transactions and make them happen."

Over the summer Walstead also agreed a new €130m group-wide three-year invoice factoring facility with BNP Paribas Fortis, which replaced its previous facilities with RBS and continental provider Raiffeisen Factor.

Funds from the new facilities have been used to repay a €43m short-term loan with ABN Amro.

“All our UK plant and machinery is now funded by Close, and all our factoring is covered by BNP with headroom to grow. It gives us a more long-term funding strategy,” Rothwell added.

Rothwell said the group had generated cash from inside the business to pay for its 2018 acquisition of LSC’s Polish web business – now Walstead Central Europe – which he said was “testament to the performance of the group”.

The Walstead Holdings accounts for last year just filed show an unusual €24.89m 'bargain purchase' gain on the LSC Europe deal due to negative goodwill, because it paid €41.7m for a business with net assets of €63.9m. A further €2.6m gain was made on the purchase of NP Druck.

Walstead had already announced that its results for last year had been impacted by paper prices rises. Profit after tax before exceptional items fell from €11.7m to €2.7m.

Separately, Walstead group chief financial officer Zoe Repman is leaving the business in what was described as an amicable departure. Repman is currently working her notice period. She has been a director of Walstead, and prior to that Wyndeham, for a decade.

Walstead is the biggest web offset printer in Europe. Pro forma sales are around €700m.