Deal done:
Sale of Manufacturer of Ground Support Equipment and Aircraft Production Tooling

Turnover:   £1.2m
Deal completed in:       10 months

The Company

A 70-year old family business manufacturing ground support equipment and aircraft production tooling to the aviation industry and military. Its high-profile clients included the MoD, a customer for over 60 years.

The factory and offices were located in a prime location close to motorway networks and a major airport in the South East of England, and represented an interesting property development investment in itself.

The company had established a strong range of reliable products and solid contractual links with its clients and was in a position to expand with new, younger management into the commercial aircraft manufacturing and operating sectors.

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The Situation

The vendor was in his seventies and wished to retire. However, there was no family member or obvious successor available to continue the business.

Looking at the business, it was clear to us that sales and marketing needed to be driven towards building on the company’s strong core presence in the defence market. Not only this, that the business could be successfully expanded into the commercial aircraft manufacturing and operating sectors, and existing products extensively marketed across Europe and Worldwide.

The sale offered an outstanding opportunity as a bolt-on opportunity for a company looking to break into the military aircraft industry sector or one wishing to expand its existing operations.

The property was owned by the company; therefore, to be able to benefit from entrepreneurs’ relief on the sale of the company, a key objective was to sell both the business and the property together within the company. At the same time, the property was potentially worth more as a property development project than as an industrial property housing an engineering business; but in the same way, the engineering business was worth more being able to operate in-situ with the capacity to expand within the site.

What Hornblower Did

Alongside a selected commercial property partner, we launched a two-pronged approach to find either a property investor who would pay a premium for the site or a trade buyer / industrial business investor who would be prepared to acquire both the business and site.

Having launched an intensive marketing campaign with a focus on our established network of buyers in the engineering and aerospace sectors, we generated over 90 enquiries, 75% of which were received in the first 3 months.

We qualified each of these enquiries to produce a shortlist of 6 suitable potential buyers and arranged meetings and viewings between them and the vendors.

One buyer made an unconditional offer on the property alone and we reached advanced discussions with two others regarding the business alone. A fourth, the successful buyer, was a trade buyer in the aerospace sector who made a strong offer for both the business and the property, achieving the full target valuation for our client.

Louis Wheeler, our Business Sales and Acquisitions Consultant, led the sale throughout the entire process. Once the offer was accepted, the sale moved swiftly to its successful conclusion. We prepared the Heads of Terms agreement and managed the transaction process until completion. A key component of this particularly smooth acquisition process was the strong relationships Louis developed with both the vendor, key company staff and the buyer, keeping the deal on track and proving the value of the business throughout.

A sale of 100% of the shares was agreed, and the Operations Manager, the long-standing day-to-day manager of the business, agreed to postpone his retirement until an exhaustive handover had been undertaken.

The entire process from appointment to completion took just 10 months.

SOLD – May 2017