Summit has worked with Seven Investment Management to provide funding for business relocation, office fit out and the acquisition of new high technology assets.
Romad Ltd is a market leading specialist solutions provider of mobile location based services (LBS) for lone worker protection and personal security. They manufacture the Romad Personal Safety Phone, a powerful cell ‘phone based GPS location tracking product that provides security and peace of mind for lone workers in both the Public and Private sector across Europe.
Our customer, a major hardware manufacturer that specalises at delivering and implementing client served desktop systems, was granted a major sub-contractor remit by a well known IT outsourcing company.
HM Government - outsourcing contract
Our customer, a major hardware manufacturer that specalises at delivering and implementing client served desktop systems, was granted a major sub-contractor remit by a large IT outsourcing company. The outsourcer had been awarded a nine year contract by the UK government to enable users to access centrally stored data and government stationery. Payments from HM Government to the outsourcer were geared to the number of users who could access the system.
The outsourcer intended to pay our customer on a similar basis to the way it was paid as prime contractor, with payments over the life of the contract subject to certain performance criteria.
Not unreasonably our customer wished to recognise revenue on it’s hardware and professional services (amounting to some £11 million) and approached Summit Asset Management as its vendor programme manager to suggest a structure for a transaction that would allow it to do so.
Summit helped to design and draft the sub-contract service agreement between the primary outsourcer and our customer, identifying a proportion of the payment stream that could be considered as non-cancellable following the completion by our customer of certain performance related obligations.
Our customer was able to assign the entire receivables stream to Summit. We also purchased all of the equipment and rebated back to the supplier the excess funds over and above the value of receivables it required to finance the £11 million of hardware and services.
Summit financed this transaction by way of a non-recourse financing supported by a security assignment over the sub-contract receivables.
This financing was made more complicated by timing pressures dictated by our client who wanted to recognise his sale before completion of his performance obligations. Summit accommodated this by taking further security from the hardware supplier to cover his future performance undertakings.
Our client was able to conclude a sale within its timetable, recognising revenue with no recourse to its balance sheet (other than the normal performance undertakings that it would give in the normal course of business)