BIW undertakes recapitalisation

One of the UK’s leading providers of Software-as-a-Service construction collaboration applications, BIW Technologies, last week announced that it has successfully completed a recapitalisation deal backed by its largest shareholder, NovaVest Fund 1 LP (advised by Tempo Capital Partners LLP). Around £3.5m in outstanding corporate debt has been settled and around £300,000 of new working capital is now available to further develop the business.

The directors of the company says the financial re-engineering has left the business wholly financed by equity, trading profitably, with cash reserves and no debt, making it “significantly more financially secure than its peers” and “best placed to capitalise on any upturn in the economy.”

Monitoring the UK sector over the past year or so, I have talked to several of the UK vendors about how the recession has made an impact and it has been clear that project cancellations and postponements have hit their revenues, leading to some belt-tightening and even a few redundancies. The steady growth achieved by the leading UK-based players like BIW, 4Projects (see post) and Business Collaborator up to this year is unlikely to have been maintained through 2009; the recent gradual turnaround in Asite‘s fortunes looked to be slowing in June (see post), and small player StoreData’s revenues have continued to slide (see recent post).

In such circumstances, a strong balance sheet with no debt, cash reserves and the prospect of a modest profit in the year to 30 September should reassure BIW customers about the business’s future, and BIW CEO Colin Smith is already talking bullishly about “a number of promising strategic developments which will begin to bear fruit in 2010”.

[Disclosure: I used to work for BIW Technologies Ltd, still undertake occasional paid PR consultancy projects for the company, and received a confidential briefing from BIW about its recapitalisation.]

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  1. Recapitalisation or rescue? Although you disclose your connection to BIW I think think this posting is disappointingly misleading in that you completely fail to mention that BIW Tech’s parent company and 100% registered shareholder BIW plc went into administration on 2 September. Perhaps you could fill in the missing details here and explain exactly what did happen. I for one am relieved that BIW was able to find funding in time to stabilise it as it’s failure would have created great nervousness in the market place.

  2. Happy to clarify the situation as far as I can, Robin (incidentally, I was not briefed on the timing of the administration – I only learned of the “Appointment of Administrators In the High Court of Justice Chancery Division” last Tuesday, 8 September).
    As I understand it, this was a recapitalisation backed by the largest shareholder and supported by BIW’s management. Purely as part of the process, the holding company, BIW plc, which had loan notes it was having difficulty refinancing because of a lack of agreement among the holders, was placed in administration and the trading company, BIW Technologies Ltd, which has continued to trade profitably, was bought in a deal agreed by the major shareholder.

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  4. […] retained a strong management team led by Colin Smith. After BIW plc went into administration, it recapitalised in late 2009. Effectively a ‘pre-pack’ deal was done that allowed previous directors and […]

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