Kramp - New financing structure enabling growth

“I have been working with Orchard with full satisfaction for several years now. During these years, I got to know Orchard as an expert organization where quality and customer focus are of paramount importance. Their position in the market and up-to-date sector knowledge enables them to deliver great added value in the negotiation process, which contributed to significant savings.”

Danny Westendorp, Finance Director

Challenge

Kramp Groep (hereinafter referred to as “Kramp”) is a total supplier of parts for companies in the agriculture, garden and park, and earthmoving sector. Kramp is an international player with a strong growth ambition, both organically and through acquisitions. In 2016, Kramp entered into an agreement with Schouw to buy back Schouw's shares in Kramp. The combination of investing in growth and share buybacks resulted in the desire to significantly expand Kramp's credit facilities and associated financial ratios and covenants.

Solution

Mid-2016, Kramp hired Orchard as its financing advisor. Orchard has translated Kramp's plans into a new, desired financing structure. Together with Kramp, Orchard has set up a competitive process with existing and new banks, to select a new bank group for the refinancing. Subsequently, Orchard advised Kramp on the establishment of a new cash management structure, using the new banking group. Finally, Orchard supported Kramp in the selection and organization of a non-recourse receivables financing as part of the financing package.

Results

At the end of 2016, Kramp signed a new financing agreement that meets all of Kramp's wishes and also offers significant savings on financing costs. In 2017, a new cash management structure was designed and contracted with the financing banks, resulting in a more efficient cash management process, and significant savings on bank costs. In 2018, Kramp set up a securitization program for the non-recourse financing of its trade receivables in the Netherlands, Belgium, France and Germany. A further roll-out to other countries is possible. With this program, Kramp's financing options increase and Kramp realizes further savings on its financing costs.