It was a pleasure to catch up with Patrick Lynch over coffee recently and hear more about him and the deal market over the last couple of years.

It's clear to see why Patrick was crowned South Yorkshires Emerging Dealmaker of the Year at the 2021 Insider Dealmaker awards. I'm sure were going to see a lot more of Patrick in the deal market over the coming years.

‍

Being South Yorkshire's emerging dealmaker 2021 must have been a very proud moment for you? What are the most important factors in your success?

 

On the back of a successful but challenging year (resulting from the pandemic), where we had worked extremely hard, it was fantastic to receive the recognition as South Yorkshires emerging dealmaker.

When I started at Castle Square I had very little corporate finance experience. I could not be where I am today without the guidance and support of colleagues and other professionals, I have worked with over the last6 years. I have learnt a lot since walking into Castle Square in February 2016.

The success we’ve had as a business has been down to hard work of the whole team which enables Castle Square to provide a first-class service to all clients. As a firm we do very little marketing and virtually all work is won through recommendation from key work referrers.

 Providing clients, a first class service has meant we have built, and continue to build, a network of contacts and key work referrers such as clients, solicitors, funders and other professional partners, which has provided opportunities to myself and enable Castle Square to be a well-established firm of expert M&A advisors, to clients across the UK.

 

Tell me about the deal your most proud of in your career so far?

‍

There are several transactions that come to mind in recent years that I have had the pleasure of advising on, for many successful high-profile businesses across multiple sectors.

The majority of transactions we advise on are life changing and transformational for our clients therefore it gives me enormous pride to work with successful business owners and allow them to maximise their potential, which is in some part is achieved through the services provided by Castle Square.

The two transactions that spring to mind that give me the most pride in the last 12 months are:

·       Management Buy in of Masteel UK Limited which completed in February 2021; and

·       Management Buy Out of Director Valeting Limited which completed in August 2021.

 Both transactions were originated through professional contacts and where transformational to the clients involved.

The Management Buy in of Masteel UK Limited was a transaction that completed after I was introduced to Sheffield based entrepreneur Darren Bradley, since late 2019. Darren had had a very successful career in the steel and engineering industry and had for 20+ year operated at Board level for some of South Yorkshires most high-profile companies the sector.

After spending the best part of 9 months to a year searching for acquisition opportunities for Darren we successfully reached heads of agreement to acquire, Masteel UK Limited, a £20 million turnover specialist metals procurement and engineering business based in the Midlands.

Management Buy Ins are notoriously challenging to fund, never mind during a global pandemic. The first key part of any deal, before negotiating heads of terms, is to get the Principle(s) and their advisor(s)comfortable that the client and deal structure we were about to propose.

After running a competitive fundraising process, we received three offers of funding and successfully completed the transaction in February2021. Since the transaction completed, profitability has increased by almost50%, which has created a significant amount of equity value for Darren and his family in less than 12 months of closing the deal.

The Management Buy Out of Direct Valeting was the second transaction we had acted on for this client, having advised on a development capital fundraising in early 2020.

Direct Valeting was wholly owned by an institutional investor (a subsidiary of global investment banking firm BNY Mellon), who relied solely on the UK based Management Team to deliver returns for their investors.

The Managing Director, Jason Carpenter, had begun his career at Direct Valeting in the mid 1990’s washing vehicles at his local car dealership. Over a 15-year period Jason had progressed through the Company to a senior board level employee and in 2016 was promoted Managing Director but had no equity interest in the Company at this time.

Under the stewardship of Jason and his co – Directors, Lesley Murphy and Steve Brown, Direct Valeting had developed into a UK wide professional valeting firm for main car dealerships located across England and had recently launched in Scotland. Annual turnover had increased from £22million in 2016 to almost £40 million by 2021.

From valeting cars in the mid 1990’s to Managing Director and majority shareholder over a 25 year period, is some story. This was something I was incredibly proud of, to have a small part in helping achieve.

 

What attracted you to a career in Corporate Finance and what would be your advice for anyone looking to start a career in the sector?

 After leaving sixth form, I had a planned to go to university, however instead I decided to jump into the world of work. I joined a small accounting practice, where I gained a strong grounding for the core principles of accounting.

 I was fortunate enough to be in the right place at the right time and due to changes within the firm structure, I was given exposure and responsibility to manage some of the firm’s largest clients, whilst at an early stage of my career (I was still in my early 20’s).

The experience of regularly dealing first-hand with businessowners and senior board members of companies, gave me the opportunity to develop my skills and confidence to communicate and manage different personalities and characters, which has put me in good stead for when I was ready to move my career forward.

Just before qualifying as a member of the ACCA, due to alack of clear career progression, I decided I wanted to explore new opportunities. Corporate finance wasn’t something I had considered at this point, however it was suggested as an option to me. In comparison to other roles within the industry it appeared to offer the most variety, it seemed to be dynamic and was a commercially exciting opportunity for me to develop my career. After completing a competitive interview process at Castle Square, I decided Corporate Finance was definitely for me.

My advice to anyone considering a role in Corporate Finance would be to “earn your stripes” and gain a strong grounding in the accounting principles initially which can really help.

It is also important to have an understanding and natural interest in business; a strong commercial awareness, including keeping up to date with the industry through business publications to understand market conditions and trends. It’s also important that you are genuine and a natural communicator, enjoy meeting people and have a natural flair for negotiation.

 

What are your thoughts on the deal market in 2021 and do you have any predictions for the coming year?

The merger and acquisition market is extremely buoyant. As a firm we have been continually busy.

We have the pleasure of advising some hugely successful entrepreneurs and market leading firms, who are seeking quality corporate finance advice and services be that corporate disposals, acquisitions, refinancing, growth capital fundraising and in recent years we are seeing more clients looking for partial cash out transactions.

The funding markets are awash with cash and are therefore seeking quality businesses with quality management teams to deploy capital behind. This is evident in several recent competitive bidding process we have run which have culminated in multiple offers and therefore multiple choices for our clients to consider – this bodes well for 2022 and this looks set to continue beyond.

‍