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© CHRYSTAL CAPITAL - ALL RIGHTS RESERVED Chrystal Capital Partners LLP Specialists in alternative sources of funding
© CHRYSTAL CAPITAL - ALL RIGHTS RESERVED
Chrystal Capital Partners LLP
Specialists in alternative sources of funding
© CHRYSTAL CAPITAL - ALL RIGHTS RESERVED
About us
• FSA regulated corporate finance firm based in London
• Specialists in alternative sources of funding for private and public companies
• Large network of family offices and niche institutional investors
• Proven experts in capital markets, corporate finance, private equity & fund management
• Seven completed transactions in the past 18 months raising over $260 million
• Global outlook: completed deals in Canada, Poland, Ireland, US & UK
• Sector agnostic: clients in mining, energy, software, gaming, consumer goods, specialist
manufacturing, financials
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Family office capital
• Strong and growing network of large single family offices
• Significant discretionary capital that can be invested opportunistically in the best deals
• Tend to have few restrictions on where and how they can invest their funds
• Able to move quickly and decisively when assessing a potential investment
• An under-deployed pool of capital bridging the gap left by retreat of traditional finance sources
• 200+ family offices in Chrystal’s network
Assets of $250m+
Mostly seeking direct investment opportunities in private and public companies
Diverse sector and geographical focus
Strong appetite for natural resources, technology and consumer businesses
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Convertible bonds: listed small & mid-cap companies
• Typical bond characteristics
Minimum £20m bond offering & maximum of 30% potential dilution
Unsecured debt obligation or covenants with an offset to senior indebtedness
Instrument publically traded by global institutional investors
• Key issuer characteristics
Market cap minimum £50 million
Financial stability with strong earnings growth and interest cover
Proven management team & transparent operations
Liquidity preferably £1m+ daily trade, ideally c.£3m
• Historically the preserve of large-caps, now available to smaller issuers
Chrystal has acted on two recent financings: £65m raised for Sportingbet Plc and $70m for Lonrho Plc
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Smaller convertible loans: listed small-cap companies
• Partnership with Optimus Capital to source & finance secured convertible loans for listed smaller companies
• Typical loan characteristics
Private, secured convertible loans of £500k to £10m
3-5 year duration
Coupon typically 8-10% p.a.
IRR to conversion including redemption premium 20%
• Key issuer characteristics
Funding must deliver transformational impact on the business
Proven management team & transparent operations
Coupon must be affordable out of cash flow
• 13 transactions completed by Optimus team in the last three years
Examples include Spiritel, bglobal and Cleardebt
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Commodity stream finance: listed natural resources companies
• Alternative asset source of development finance for listed natural resources companies
• Typical finance characteristics
Immediate up-front capital payment: $10–$200 million to develop or expand projects
Subsequent fixed payments based on production cost per unit of resource produced
Share of future production ranges from 5-30% of output
• Typical company characteristics
Listed resources companies: precious metals, base metals, coal, oil & gas
Assets within 24 months of production in stable geographic locations
• Advantages over traditional debt and equity
Asset specific: does not dilute company’s other projects
Finances project development without diluting shareholder value
Less onerous than debt: retains flexibility for raising debt in the future as assets are unencumbered
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Example deal – Silurian Hallwood Plc
Private oil & gas company focused on Poland, the largest shale play in Europe
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Company • Strong management team with decades of experience in US shale exploration and production
Finance raised • Private equity placement of £13 million
Preparation • Silurian Hallwood came to Chrystal at a very early stage and required significant preparation prior to raising finance
• Chrystal advised on business & financial strategy, strategic positioning, branding & website
Investors • Majority of the investment placed with a large European family office
• Three additional smaller family offices invested alongside
Use of funds • Funds used to continue development of 577,000 net acres of land that lie in the shale oil window of Poland
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Example deal – Escher Group Plc (LSE:ESCH)
Escher’s financial transactions platform is global market leader in the Post Office counters market
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Company • Operates in over 30 countries processing over 3.4 billion transaction s annually
Requirement • Following 2007 MBO Escher required equity funding to repay bank and PIK debt to move to a more conventional capital structure
• Growth capital was also required for the development and launch of a new product
Solution • Chrystal advised on attaining VCT status and introduced both VCT investors and Panmure Gordon as Nomad and Broker for the IPO
Fund raising • $25m raised via an IPO in August 2011 at 170p per share
Result • 3rd best performing IPO on AIM in 2012 – up 56% as at 8 March 2012
• PIK loans and a substantial part of the bank debt also repaid
• Remaining debt has been refinanced through a long term facility
• Finance enabled Escher to win a major contract in USA
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Example deal – Sportingbet Plc (LSE:SBT)
Main listed Sportingbet (£210m market cap at time of transaction): global online gaming operator
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Origin • Knowledge of both the gaming sector and the inadequacy of equity capital markets as a source of capital led to pro-active approach to company
Structure • £65m 5 year Convertible Bond
• Coupon rate 7.0% payable six months in arrears
• Initial conversion price a 20% premium
Investors • Large blue chip international convertible bond investors
• CEO Andrew McIver commented “The bond has brought a whole new group of investors to the Sportingbet story”
Result • Proceeds financed the acquisition of Centrebet, an Australian listed online sportsbook operator.
• Equity dilution for shareholders reduced
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Other recently completed transactions
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Chrystal Capital Partners
Dr Mustapha Omar - Head of Research at Collins Stewart and Fairfax
- Main Board Director at AIM-listed Nviro
- Co-founder of Chrystal Capital
Kingsley Wilson - Media Analyst at Collins Stewart and Investec Securities
- Co-founder of First Columbus & Chrystal Capital
James Innes - Corporate Finance at Andersen
- Private Equity at Isis Capital
- Co-Founder of Convex Capital & Chrystal Capital
Stephen Ford - Technology, Water and Gaming analyst at Collins Stewart
- Co-founder Essential Capital Management
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Contact us:
Chrystal Capital Partners LLP
New Broad Street House
35 New Broad Street
London EC2M 1NH
T: 020 7850 4760
F: 020 7023 4904
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