Los Angeles-based Ares Management Corporation announced on Monday that funds managed by its European direct lending strategy are serving as the sole lenders of £1 billion of available debt facilities to the Helsby, Chesire-based consultants RSK Group, the UK’s largest privately-owned multi-disciplinary environmental business.
RSK Group has increased its annual turnover from £209 million in financial year ending March 2019 to a proforma estimate of over £600 million for the current financial year.
RSK Group anticipates that by 2025 it will employ over 10,000 people and have annual revenue above £1 billion.
“This transaction marks the largest private credit-backed sustainability linked financing to date and will be used to refinance RSK’s existing credit facilities as well as support its continued organic and inorganic growth plans,” said Ares.
“The new debt facilities include an annual margin review based on the achievement of sustainability targets, which are broadly focused on carbon intensity reduction and continual improvement to health and safety management and ethics.
“These targets are aligned to RSK’s Corporate Responsibility and Sustainability Route Map, which forms the basis of its sustainability strategy, based on RSK’s sustainability pillars and the United Nation’s Sustainable Development Goals.
“RSK anticipates interest savings in excess of £500,000 per year and has committed to donate a minimum of 50% of this margin benefit toward sustainability-related initiatives or charitable causes.”
Ares Management described RSK as a “fully integrated, environmental, engineering and technical services group currently comprised of over 100 businesses and employing more than 6,000 specialists.”
RSK, led by founder and CEO Alan Ryder, has an established presence in more than 40 countries, supporting its global client base across diversified sectors, from energy to water.
“We are excited to continue to grow our longstanding relationship with RSK through this significant financing that is a first for both of our businesses and further connects us to a shared sustainability commitment,” said Michael Dennis, co-head of the Ares European Direct Lending strategy.
“We have enjoyed the opportunity to be a financing provider to Alan and his team for nearly three years as they have executed on an impressive strategy to scale RSK’s capabilities and its mission of expanding ESG into its clients’ business model and practices.
“We are confident that the positive tailwinds for ESG across the spectrum of businesses and sectors will continue to drive demand for RSK’s service offering, and we are proud to support the company on this journey.”
Ryder said: “There are very few firms like Ares that possess the scale, flexibility and sharp focus on ESG to provide a sustainability linked financing of this kind.
“This financing demonstrates our deep commitment to driving sustainable business practices not just within our clients’ businesses, but also within our own.
“We look forward to continuing the great relationship we have with the Ares team while responsibly expanding our services and geographic footprint as we strive to bring the most comprehensive range of sustainable solutions to our clients.”
Ares Management Corporation’s global platform had $262 billion of assets under management.