Securing full scheme buy-in – SA Brain & Company
- SA Brain & Company is one of Wales’ leading breweries, with its founder’s family still forming part of the shareholder base.
- Following the pandemic, the company faced significant challenges. The Trustees were concerned regarding the security of over 600 members of the S.A. Brain and the Crown Buckley Limited Pension Schemes.
- The Trustees were keen to improve security for members through a combination of de-risking, additional contributions and security over Company properties.
- The Company appointed Isio to support them through the funding and long-term strategy negotiations and help the Company achieve two key objectives:
- The long-term survival of the business as a sustainable brewery
- That members received benefits in full
- Once appointed, we worked closely with the Company to understand their needs and objectives.
- We considered solutions that improved security for both Trustees and members, without putting the Company under further financial strain.
- There was a limited source of capital to develop the solution, primarily from funds already held in an escrow (following a sale of another part of the business)
- As insurance was not immediately affordable for the Schemes, we explored alternative solutions, such as a Capital-Backed Journey Plan, which would improve security for members and reduce volatility for the Company.
- However, following the LDI crisis in September 2022, the Schemes’ funding positions improved significantly making insurance achievable.
- All stakeholders and advisers worked collaboratively to prepare Scheme information to share with insurers and seek a quote.
- In early December the Company received a transactable quote from Just Group to fully buy-in the two Schemes
- The Schemes had some illiquid assets and so we had to work closely with the Company, the Trustee, their advisers and Just Group to find a solution to this potential barrier.
- We worked closely with Just Group, Quantum Advisory, Gowling LLP, Travers Smith and Independence Governance Group throughout the process.
- Full buy-ins were achieved for both Schemes (c. £70m total liability)
- The transaction provided improved security to all members
- The transaction enabled the Company to demonstrate less risk of future pension funding requirements to lenders.
- ‘Brains’ are now able to focus on the business’s future.
- Their CEO was recently interviewed by the BBC on challenges he has faced – read the article here.
I am delighted that we have been able to secure a full scheme buy-in with Just Group. It is a massive step forward for the strategic plan for Brains. A big thank you to James and Laura at Isio who helped to make this happen.
CEO, SA Brain & Company