In one transaction Fairstone Group has secured a £25m equity investment into the business setting the company on a firm path to accelerate its growth plans over the next few years and further establish Newcastle and the North East as a highly attractive region for one of the UK's key industries, financial services.
Based in Boldon, Fairstone is a highly scalable and technology leveraged businesses. Founded in Newcastle in 2008 Fairstone has grown to encompass over 260 IFAs throughout the UK offering tailored financial advice to in excess of 25,000 private clients with £5.8 billion of assets under advice. The Company is also one of the largest Chartered Financial Planning firms in the UK .The investment will allow the company to accelerate its successful Downstream Buy Out acquisition model beyond its current forecasts.
Prior to the transaction, Cavu had worked closely with Fairstone for more than two years, recognising the significant potential in the company and the requirement for high quality and innovative corporate finance advice to achieve the company’s and shareholders’ objectives.
Cavu introduced Fairstone to a number of private equity firms including Synova Capital who ultimately committed an initial £25m of investment to Fairstone. The transaction is the largest investment ever made by Synova, and was also the maiden investment from their newest £250m fund.
The transaction was highly complex. The company has a unique acquisition model that needed careful presentation to the market, a diverse shareholding structure including a number of overseas shareholders requiring a high level of shareholder communication as the deal progressed and a number of technical matters driven by the regulated market place in which Fairstone operates including approval from the FCA for the transaction to go ahead.
Nothwithstanding the deal challenges there was significant interest from the private equity community driven by the opportunity to consolidate a fragmented sector, a high calibre and highly innovative management team and a unique business model in which Downstream Buy Out target firms join the Fairstone platform before being acquired enabling buyer and sellers to work together for a period before a full acquisition takes place.
Commenting on Cavu, Lee Hartley and CEO of Fairstone said “”Cavu led the deal for us from start to finish, sourcing suitable investors and structuring the deal to meet our deal objectives and we would have no hesitation recommending them to any other business looking to raise private equity or development capital. They were excellent and spent time understanding our business and how best to present the opportunity to private equity investors to deliver the optimum deal”
The Cavu Corporate Finance team was led by Shawn Bone. Commenting on the deal ” Synova’s investment will enable the continued acceleration of Fairstone’s consolidation strategy to create the leading independent IFA platform in the UK. Fairstone has real differentiation and attracted significant interest from private equity investors and we look forward to working with Lee and his team on an ongoing basis.”
