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.]