The Business
Buy As You View is a retail and consumer finance business selling a range of electrical and household goods on three-year hire purchase agreements. Customers have limited access to credit and make low regular weekly payments without the requirement of an upfront deposit or conventional credit check. Payment discipline is managed through a meter and customers are serviced through a field-based sales and collection workforce. The business was acquired from a syndicate of banks who had taken control from a financial sponsor.
Investment thesis
The initial equity investment in BAYV was underpinned by a solvent run-off of the loan book. The investment plan was centered on developing and better utilising technology across the business including both collections and sales. Firstly, stability and control of the business was achieved, followed by development of a “smart meter” to improve the control and performance of the loan book. The plan then revolved around restoring the business to controlled, self-funded growth.
Exit
The initial deal was done all equity, with a major refinancing achieved in 2014. In 2015, the business was caught up in a wider review of the rent-to-own sector by the FCA which severely restricted the ability of the sector to write new loans and resulting in a restructuring deal done with the lending banks.
