Achieving a greater global foothold
Santander helped the team behind this international management consultancy expand their capability to bid for bigger global clients
- Company turnover: £127 million
- Sector: Professional services
- WYG is a large international management consultancy with a range of large clients.
- A combination of historic strategic decisions and the global downturn caused the business to stumble before recently undergoing a restructuring process that saved the business. The company is now profitable and growing again.
- To coincide with this resurgence the company began looking for a new bank.
- Santander stood out because it was enthusiastic about the business and was ready to tailor its solutions.
- The deal was complicated, but Santander went to great lengths to simplify it for WYG, spending several months helping to extricate it from old financial arrangements with a collection of other banks.
- The company now has a Trade Finance facility, helping it to bid for bigger global contracts. WYG can now look forward to further growth.
WYG has all the elements of a successful international business: a strong heritage of growth, international sales channels, a diverse client-base full of big, dependable organisations all with major spending power and £127 million in annual turnover. But only a few years ago the business was in crisis; its reputation severely impacted by its high levels of debt and growing questions over its long-term viability, coinciding with the global economic slowdown. This combination of factors threw the business’ very existence into doubt.
“In 2009 when the world economy fell off a cliff we fell off with it,” says Steve Oldroyd, Group Financial Controller of WYG. “We had £100 million of bank debt and had made numerous acquisitions but failed to integrate them. The business employed around 4,000 people before the crash and that fell to around 1,300. There was a major refinancing round and a complete change to the executive management team. Today those events feel like Day One and everything before was a different business.”
The new management team turned the business around, reversing significant losses to make a profit in its 2013/14 financial year. Lately, it is growing and winning contracts, and has clawed back a reputation for excellence and project success.
Santander were really keen to build the relationship
As part of the transformation, the business began searching for a new bank. Under the old set-up WYG had a banking club, a complicated arrangement of legacy relationships involving three institutions, none of which wanted to take the business forward. “The results were improving and we were delivering on promises,” Steve explains. “The share price was increasing and generally we were in a much better position throughout 2013 to start actively looking for a new relationship with a single provider.”
Santander was one of three banks the WYG team approached and quickly proved its commitment to supporting the growing business. Santander was “the most enthusiastic about the opportunity,” says Steve. “You could sense Santander were really keen to build the relationship.”
Bidding for bigger contracts
As a cash-rich business WYG didn’t require a large loan as part of the deal. The business’ main objective was to extricate itself from its old banking ties and move to a bank that could support its international growth plans. To bid for major projects, the business required a bank bond agreement that provided financial guarantees to clients when they advanced large payments.
As part of the deal Santander granted a £15 million Trade Finance line, which allows WYG to bid for more and larger contracts around the world. It also provides day-to-day banking and a small foreign exchange facility.
Ensuring a smooth transition
Santander Relationship Director Nick MacHugh describes the deal. “It was very complex because of the size, scope and history of the business,” he says. “We spent a lot of energy making the transition as smooth as possible for the company, putting our customer implementation team to full use. The process also required a lot of communication across multiple channels and we looked to create several points of contact between WYG and Santander to ensure information could flow freely in both directions.”
Steve concurs, saying, “They communicated very well throughout the process and were very proactive. Santander invited us to several events and there have been a number of occasions when we went to them with requests that were slightly out of the ordinary and they always worked with us to arrive at a solution. It’s a very positive attitude.”
The process took eight months in total and the business was fully re-banked in March 2014. The timeline was due mainly to extricating WYG from its old banking structure; Nick was able to secure buy-in from his colleagues and move to an initial credit stage within 10 days of meeting the WYG team.
A bank that took an active interest
Nick says WYG’s management team were of a “very high quality” and their presence alone formed a convincing case for potential growth. “Ultimately that is the test for any business,” he says. “Whether or not you can believe the story and their ability to deliver it. The company’s journey was underway and they had already delivered a profit. The order book was also strong, with new international markets opening up, and as such future activity looked sustainable. The business was entering an exciting period of growth.”
The deal has breathed new life into WYG and the company can now extend its reach and bid for international contracts with confidence. Growth is strong and future prospects for WYG look very rosy, according to Steve. “Access to bonding facilities has been huge for us and has opened important markets, where before we were struggling to maintain our presence. Having a helpful, supportive bank also gives us confidence to look for new strategic opportunities and we know we will have an interested audience when we want to pitch new ideas.”
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Relationship Director Comments
We looked to create several points of contact between WYG and Santander to ensure information could flow freely in both directions.