Lantern raises a syndicate financing facility with specialist banks Hampshire Trust Bank, Paragon and Shawbrook and alternative investment firm, BCI Capital

Industry News | 06/06/23

The EY FS Corporate Finance team has recently advised Lantern on the successful completion of a £97.5m amendment, refinance and extension of its existing facility, made up of an initial commitment of £77.5m and an accordion of £20m, with a syndicate comprising specialist lenders Hampshire Trust Bank (“HTB”), Paragon Bank (“Paragon”), Shawbrook Bank (“Shawbrook”), and alternative investment manager BCI Capital (“BCI”).

Lantern, established in 2008, is a leading specialist debt purchasing and customer management services provider, with a particular focus on vulnerable customers. Lantern has established itself as a trusted partner with a significant number of the leading specialist lenders, generating both spot and forward-flow debt purchase opportunities. Lantern also provides additional services such as vulnerability identification and outsourced managed services across both financial services and utility clients, through its subsidiary Sonex. In October 2017, Copper Street Capital (“CSC”), a financial services specialist investor, acquired a majority stake in Lantern. Since then, Lantern has grown to £30m in net revenues, £13m EBITDA and £130m ERC.

The facility will help Lantern to achieve its significant growth ambition, through the purchase of an increasing supply of new non-performing debt portfolios over the coming years.

CEO at Lantern, Denise Crossley, welcomed the announcement of the deal saying:

“We are delighted to be working with HTB and continuing our existing relationship with Paragon, Shawbrook and BCI. The extended facility will allow us to continue to grow our portfolio acquisitions, consolidate our unique market position and deliver our future strategy. We expect to reinforce existing client relationships and build successful new partnerships with consumer lenders looking to work with Lantern as a trusted specialist.”
Managing Director, Massimo Araldi at CSC:

“We have worked with EY on the original Lantern facility three years ago to leverage on their unique knowledge and experience in the debt purchase market and asset-based financing. In this transaction they were instrumental in achieving a very successful outcome for Lantern, both in terms of size and terms of the facility. This will provide significant firepower to the business to take advantage of significant market opportunities in the next few years. We look forward to continuing working with the EY team.”

Senior Manager, Jack Dutton at EY:

“We are delighted to have been able to support Lantern throughout this fundraising process, which further strengthens our relationship both with the business and CSC. The upsized facility provides Lantern with the headroom and flexibility to continue to be dynamic and nimble in its acquisition of portfolio opportunities with both existing and new partners. We would also like to thank Addleshaw Goddard, the teams at each of the lenders and their respective legal counsels, who were all a pleasure to work with.”

EY was appointed as sole financial advisor to Lantern on the transaction.

The EY engagement team comprised of Stuart Mogg, Jack Dutton, Arihant Jain and Emily Holmes.

Addleshaw Goddard acted as legal counsel for Lantern, with Travers Smith acting for HTB, Shawbrook and Paragon and Simmons & Simmons acting for BCI.