Crown Paints refinances for growth

Crown Paints Limited, the UK's largest independent decorative coatings manufacturer, has secured a new £25 million funding package from RBS, significantly increasing the capital available to the management team as it drives the 200-year old company into its next phase of expansion.

Since its buyout from Dutch coatings manufacturer Akzo Nobel in September 2008, backed by private equity firm Endless LLP, Crown has undertaken a major programme of reorganisation, which has seen it accelerate its return to profitability by strengthening the management team, improving efficiencies across the manufacturing process and growing the export sales side of the business.

The new funding will underpin Lancashire-based Crown's future growth strategy, providing the management team with immediate access to additional working capital and greater capacity to invest in the business alongside the existing equity support from Endless.

Chief Executive of Crown Paints, Brian Davidson, commented:

"This funding is excellent news for our employees, our suppliers and our customers. It's no secret that the past two years have been very difficult for manufacturers serving the construction and DIY markets, and Crown has been no exception. However, by implementing a wholesale restructuring programme, keeping a tight control on costs and adopting a more flexible and entrepreneurial culture, the company has weathered the storm and achieved a substantial improvement in performance."

"From a very strong asset base and a stable financial platform to build upon; this new funding from Royal Bank of Scotland will help us to invest in the business, react more rapidly to opportunities and grow our market share, not only here in the UK but also overseas where we are aggressively pursuing new export and licensing opportunities."

"We will continue to deliver further efficiencies by bearing down on costs and by working closely with our suppliers to drive value all the way through the supply chain. At the same time, we will refocus on the needs of our key customer groups and invest in our product offer, in our distribution channels and in well-targeted marketing strategies in order to build upon our strong market position."

Warwick Ley, Partner at Endless, said:

"We are proud to be bringing Royal Bank of Scotland into our partnership with Crown Paints. The commitment and approach demonstrated by RBS during the refinancing has been first rate and is a strong sign of their intent in the market. The refinancing is a great endorsement of the company and its outstanding progress made in the first 12 months of our investment, especially against the backdrop of such unprecedented economic conditions. With the excellent trading progress to date and a strong foundation for the company to achieve its ambitious goals, we are now more excited than ever about the next chapter in this investment."

Chris Hawes, Head of Portfolio Management and Structuring at RBS Invoice Finance said:

"We are absolutely committed to supporting businesses like Crown and UK manufacturing in general, recently pledging £1 billion of new loans to the sector. We are delighted to have delivered an integrated working capital package which will allow Crown to execute their medium term business strategy. Our facility provides Crown with a flexible and substantial new funding line necessary to support the management team’s growth plans over the course of the next few years. As the UK moves out of recession, Crown has seized the opportunity to build on its well-established brand and clear market position to grow market share in both its retail and trade divisions."

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