Warrior Group

Formed to acquire NAAFI Financial Services.


In 1997 Montagu led and structured the £104.2 million Management Buyin of Warrior Group ("Warrior"), which was formed to acquire NAAFI Financial Services, ("NFS"), a division of the Navy, Army and Air Force Institutes ("NAAFI"). The transaction involved £21.5 million of institutional equity funding. The senior debt financing of £77.5 million was arranged and underwritten by NatWest Markets, primarily by way of a securitisation of NFS's loan book.

NFS, originated over 40 years before, provided a range of financial services to members of the armed forces of the UK. It had preferential but not exclusive rights of access to armed forces personnel, but had to date been restricted from operating outside the military.

NAAFI had decided to exit from direct management of NFS because NFS did not form part of its core welfare services to forces personnel. The Montagu proposal was chosen against competition from a number of proposals made by consumer finance companies because it enabled NAAFI to realise the value of its loan portfolio and to retain a stake in the potential future success of the business. The MBI was led by Bob Jones, a former main board director of Lombard, the consumer finance division of NatWest Group.

NFS offered personal unsecured loans of a minimum of £500, with monthly maximum instalments typically being set according to rank NFS operates credit cards which could be used in every NAAFI trading establishment throughout the world wherever British Forces were posted, such as Germany, Cyprus, Gibraltar, Italy, Hong Kong, Kenya, Belize, Brunei, Ascension Island, Falkland Islands and in the former Yugoslavia, as well as on board H.M. ships and in the UK itself.

NFS acted as an insurance broker, through which more Service personnel arranged their motor insurance than with any other single agent. NFS had a team of Independent Financial Advisors ("IFAs") that gave advice on savings plans, life assurances, capital investment, school fee provision and pensions. They also assisted with wills, mortgages and tax planning. In addition, NFS operated fourteen car showrooms in Germany where tax free cars were sold to personnel.

This transaction was another of the privatisation deals which Montagu concluded in the 1990s.

Deal details

Deal type: Management Buy-In Investment Year: 1997 Country: United Kingdom Status: Realised Value: £125 million Industry Sector: Financial Services