A breath of fresh air for Directorbank

27th February 2007

Elizabeth Jackson, now chief executive of Directorbank, felt that the support she had from Yorkshire Bank in just such a situation was “tremendous”.

When she and her management team at Directorbank wanted to buy out the company from its parent, Springboard, all went well until, only two weeks before completion, Springboard itself was approached.

It was a publicly-quoted company and it came under a bid offer launched by Nova Capital, which saw Directorbank as one of the jewels in the Springboard crown.

As the company was now in a bid period, Jackson and her colleagues were unable to communicate with Nova at all to try to progress their own deal. “We had suddenly lost our vendor, and we had to rethink,” says Jackson.

Directorbank is a unique executive and non-executive recruitment company, with much of its core business within the private equity community.

“We identify chairmen, chief executives, finance directors and other execs who could get involved in private equity-backed transactions,” explains Jackson. “We also service the corporate market – public companies, start-ups, all manner of businesses. The common link between them all is the supply of people. These are tried an tested people, with track records, who are available pretty well immediately and are also able to bring about change. They have good solid track records in value creation.”

Before the arrival of Nova as a factor in the buy out deal, Jackson’s corporate financial advisers had recommended she approach Yorkshire Bank for help with the funding package she needed to complete the deal. Mike Selina, Specialist & Acquisition Finance at Yorkshire Bank, was the person she contacted.

“Mike and Yorkshire Bank were involved in the original transaction well before Nova put in their bid for Springboard,” Jackson explains. “From my point of view, the biggest thing they did for me was to support us all the way through the process. In spite of the fact there were significant changes to the nature of the transaction and to the players within the deal, they really didn’t waver. They were with me all the way and their attitude was almost as long as I was happy, they were happy. I think they felt if I and my management team were driving the business forward their money would be in safe hands.”

From Yorkshire Bank’s point of view, the deal was worth supporting. Apart from the obvious returns on their investment, the business community within which Directorbank operated was a similar arena to that in which Mike Selina and his team were involved.

“The association was a good one,” says Selina. “We come across a lot of companies who could provide a pool of clients for Directorbank and in turn they can introduce us to venture capitalists who may be interested in working with us.”

Elizabeth Jackson adds: “It’s potentially a much, much deeper relationship and Yorkshire Bank was never blind to that. I would say some of their competitors were much slower to pick that up.”

Eventually, the bid by Nova for Springboard was successful and Jackson was able to continue with her secondary buy out of Directorbank. The deal which Mike at Yorkshire Bank put together for Jackson and her colleagues was a mixture of senior debt and working capital.

Along with that funding, and Jackson, Nova and Directorbvank’s Jonathan Hick, rolling over all or part of their own investments in Directorbank, they were able to raise the necessary funds and the buy out went through.

Yorkshire Bank supported Elizabeth Jackson all the way. “I felt that Mike had a very sound commercial instinct and once he’d decided that this was a company he wanted to be associated with he wasn’t going to be swayed from that viewpoint at all. That’s what you need – financiers and supporters who are going to ‘go into battle with you’. I felt I had a very loyal partner in Yorkshire Bank.”

Jackson says she always felt in control of what was happening and there was a good feeling of teamwork in her relationship with Yorkshire Bank. “Even during our negotiations of certain matters of principle, which they were clearly very keen to ensure for their own protection, I thought they were very fair minded. And flexible – there were one or two occasions when I was uncomfortable with how some things were going to work and at every stage they had a sensible and positive response to my worries.”

Since the buy out, Directorbank and Yorkshire Bank have worked together on a number of initiatives, strengthening their relationship. “Since the transaction, they have been excellent,” says Jackson. “They look after their clients in a way that other banks don’t. Basically, they are a real breath of fresh air.”