Menzies Corporate Finance has assisted in the management buy-out of a leading IT recruitment company, Lexstra Plc.

Lexstra was established in 1996 and has built an enviable portfolio of long term blue chip clients who entrust Lexstra to provide high end specialist long term contract IT staff.

The Menzies team were led by Jeremy Rayment and Victoria Philips, with specialist tax advice provided by Andrew England. Jeremy and his team were brought in by Jon Cashman, Managing Director of Lexstra Plc, to advise on the feasibility and evaluation of a buy-out and to review, structure and assist with the sourcing of finance.

Commenting on Menzies involvement, Jon Cashman, MD of Lexstra Plc said:

“The company had reached a point where a management buyout was the only logical step. I was put in touch with Jeremy Rayment of Menzies by Lexstra’s bank, LloydsTSB. Jeremy proved to be an excellent choice of adviser, with deep experience and understanding of the pitfalls and challenges presented by this kind of transaction. We were in a situation in which the vendor’s requirements would change at short notice, and unexpected obstacles would be presented to which we needed to react effectively and rapidly.”

“Additionally, the financial analysis we had to conduct in order to ensure there were no post transaction cashflow problems had to be very thorough and detailed. To achieve this, Jeremy worked closely with Lexstra’s FD Simon Matthews to ensure all probable scenarios had been examined. Jeremy and his team proved to be excellent throughout, meaning that at completion I had complete confidence that the company would remain financially sound post transaction. I’d very happily work with Jeremy again.”

Cashman added:

“Jeremy also recommended a solicitor, Phil Walton of Mundays, as someone who could cover the legal side. I was concerned that the deal could be potentially problematic and complex from a legal perspective, and I was keen to ensure our legal representation was of the highest standard. A number of difficult situations did indeed develop, and Phil Walton and his colleague Nick Atkins proved to be first class in clearly presenting the challenges and in resolving them. The combined efforts of the team from Menzies, Mundays and Lexstra led ultimately to a very successful transaction.”

Jeremy Rayment of Menzies Corporate Finance commented:

“Like many of our clients, Jon was in new territory in undertaking the buy-out. However, his clarity and perspective on the desire to progress was a key determinant in the success of the buy-out. This was additionally aided by Jon’s good humoured approach in the face of a rapidly changing and pressurised situation.” 

“Whilst there were some commercial and technically challenging issues to overcome, Jon assembled a strong legal and financial advisory team around him and proved astute at picking up on the technical and commercial issues surrounding the transaction. All in all, Jon was a real pleasure to work with and now he is securely in charge of Lexstra we have every confidence in the business’s continued and future success.”

Phil Walton of Mundays, lawyers for Lexstra commented, “It was a pleasure working in combination with the Menzies Corporate Finance team. Together, we were well placed and confident to manage the distinctive Plc regulatory hurdles as well as the more usual commercial challenges that a buy-out brings. We wish Jon and his team well for a successful future.”

Lloyds TSB provided the acquisition finance.

The terms of the transaction are undisclosed.

For further information please contact:
Jeremy Rayment, Director, Menzies Corporate Finance
01784 497100
jrayment@menzies.co.uk

Menzies Corporate Finance Ltd (MCF) is the specialist corporate finance arm of Top 25 accounting firm Menzies and regulated by the FSA.