Environmental consultancy Ricardo secures £50 million credit from HSBC
As the firm looks to boost expansion efforts, global professional services firm Ricardo has secured a £50 million injection of credit from HSBC. The fund will be invested by the consultancy as it bids to become an FTSE 250 business.
As members of an increasingly crowded consulting industry bid to supplement their growth with merger and acquisition activity, as well as arriving in new markets, a number of UK-headquartered firms have looked to gain financial backing from creditors or private equity in recent years. In 2015, this saw PA sign with private equity firm Carlyle, before a spate of acquisitions soon after broke a seven year acquisition drought.
More recently, L.E.K. Consulting attracted a financing package from Lloyds Bank, to drive the firm’s expansion plans. Leveraging the capital, L.E.K. Consulting announced that it aimed to invest the funds in high growth consultancy segments, such as digital and innovation, and in growing its geographical footprint. Now, as environmental and engineering consultancy Ricardo attempts to set itself apart from a competitive market, including the recently combined Navigant and Ecofys, the firm has also sought the backing of a major creditor.
Ricardo was founded over a century ago, and has a headcount approaching 3,000 consultants, engineers, scientists and support staff worldwide. Globally, the firm enjoyed a turnover of £351 million in the 2017/18 financial year, from the business’ two areas of expertise; Technical Consultancy, which accounts for 80% of its revenue; and Performance Product, which makes up the remaining 20%.
Ricardo has secured £50 million of funding from global financial giant HSBC UK, which it will use to expand overseas and make further acquisitions as the consulting firm seeks to become an FTSE 250 business in the coming five years. The deal between the banking corporation and the West Sussex-based engineering and environmental consultancy has also seen the securing of a £150 million revolving credit facility, as Ricardo looks to make strategic acquisitions while expanding globally. Initially Ricardo is understood to be exploring new opportunities in the US and European markets, while boosting its investment in research and development to keep pace with new technologies and changing regulations.
Commenting on the news, Dave Shemmans, Chief Executive Officer of Ricardo, said, “HSBC has been instrumental in our growth and acquisition trail over the last decade. This new credit facility will enable us to proactively pursue opportunities which align with our expertise and will help us reach our ambitious growth target.”
Jon Stradling, HSBC UK Head of Large Corporates for the South Region, added, “We have been working with Ricardo for 13 years. I am delighted that we’ve been able to continue our support with this increased funding facility, paving the way for Ricardo’s substantial progression over the coming years.”
