Specialist direct lender Beechbrook Capital provided a unitranche facility for Hotcha Group Limited, a Chinese food takeaway and delivery chain in the United Kingdom. This is the fourth investment in Beechbrook’s UK SME Credit Fund, led by Jon Herbert.
Beechbrook Capital, the specialist direct lender, has completed its UK SME Credit Fund’s fourth investment, a unitranche facility for Hotcha Group Limited (“Hotcha”), the largest and fastest-growing branded Chinese food takeaway and delivery chain in the UK.
Hotcha was founded in 2011 by James Liang, its chief executive and majority shareholder, and currently has 10 outlets, all in the west of England.
Beechbrook’s investment will enable Hotcha to continue to roll out the brand, as well as helping fund the necessary expansion in the group’s central cost base. With its central production facility and call centre, Hotcha has a highly scalable business, a first in the UK Chinese takeaway market.
Jon Herbert, managing director of the UK SME Credit Fund, commented: “The opportunity to invest in Hotcha is a great example of the demand for flexible growth capital such as ours from UK SMEs. We are highly impressed by what James has achieved to date with the business, and we are delighted to be able to support him and Hotcha in its continuing expansion.”
James Liang added: “We have been exploring various means of financing the next stage of Hotcha’s growth with advisers, private equity and debt providers. Beechbrook’s unitranche proposal was the perfect fit given our current stage of growth. We have a proven business model and scalable platform within a fragmented market. This investment will enable us to continue our strong growth trajectory which will see a further 10 stores opened by end of March 2017 as we seek to be established as the UK’s first nationwide Chinese takeaway brand.”
Hotcha was advised by Attract Capital (corporate finance) and TLT (legal). Beechbrook received legal advice from Gateley.
Beechbrook Capital, a specialist direct lender founded in 2008, invests in SMEs across a range of industries in the UK and across Europe. Hotcha is the fourth investment in Beechbrook’s UK SME Credit Fund which is also invested in trampoline parks operator Oxygen Freejumping, comic convention business MCM Expo Group and 4Most Group, a company providing regulatory and credit risk analytics consultancy to banks, credit card providers and other businesses with consumer credit exposure. In addition to the UK SME Credit Fund, Beechbrook’s three private debt funds support northern European private equity-backed companies with a typical enterprise value of €10 million to €100 million, investing an average of €8 million to €9 million per transaction. The finance Beechbrook provides often fills a funding gap between equity and bank debt faced by SMEs as banks focus on large corporates and capital market activities.
Beechbrook is backed by institutional investors who are drawn to the attractive, risk-adjusted returns it generates. The firm has completed nearly 40 investments in growing European businesses since 2010.