When pan-European mid-market investor, Aurelius Equity Opportunities SE & Co. KGaA (Aurelius), sought to acquire Bertram Group (formerly Connect Books) from Connect Group Plc they looked to SIA Group for collateral due diligence.

SIA Group delivered a comprehensive accounts receivable and inventory appraisal report to the acquirer and prospective ABL lenders to provide an accurate picture of the collateral on which the assetbased lending transaction would be based. Typically, in keeping with the publishing sector, a substantial proportion of the inventory value was subject to Retention of Title (ROT) and SIA Group factored this key consideration in its valuation of these assets.

“SIA Group made an excellent job of understanding all of the nuances in respect of the collateral and communicating the position accurately and effectively to the lenders. It is not just about seeing the numbers but also being able to interpret and tell the story effectively that matters. SIA Group is highly regarded by the lenders and has a position of trust.”

BNP Paribas was selected to structure asset-based lending (ABL) facilities to assist funding the acquisition and to provide additional working capital headroom. Connect Books is a multi-channel wholesaler, distributor and retailer of printed and digital books, with operations in UK, the Netherlands, and France. On completion, Aurelius has rebranded the company back to the Bertram Group. Its brands consist of Bertram Books, Wordery.com, Dawson Books, Bertrams Library Services, Erasmus, and Houtschild.

Following the acquisition, Aurelius will also work with the team to implement its planned growth strategy across its full brand range, with a focus on expanding the business’ international footprint, service offering, marketing capabilities and e-commerce platform.

Tobias Bayer, Investment Manager at AURELIUS Investments Limited commented: “We invited SIA Group to conduct the collateral review on the assets to support an ABL transaction. Time was of the essence in respect of the deal and SIA Group acted quickly to drive the collateral review process, working proactively with the lenders to answer their detailed questions and ensuring that they were comfortable with the dynamics of the asset base.”

“Connect Books had not used ABL before and the IT systems were not geared up to reporting the information in the format required. Consequently, the reconciliation phase during the receivables review was quite challenging. We really appreciate SIA Group’s diligence and persistence in pulling all of the information together to help us complete this deal.”

He concluded: “SIA Group made an excellent job of understanding all of the nuances in respect of the collateral and communicating the position accurately and effectively to the lenders. It is not just about seeing the numbers but also being able to interpret and tell the story effectively that matters. SIA Group is highly regarded by the lenders and has a position of trust”.

Paul Craig, Managing Director, SIA Group, said: “It was excellent working with Aurelius on this transaction. Informed asset valuations and collateral due diligence are the cornerstone of any ABL transaction as they determine the quantum of funding available. This was a challenging carve -out transaction from a large PLC. We worked closely with the acquirer, the lender and the business to ensure timely delivery of the reports required to drive the successful completion of this strategic acquisition.”