|Deal completed in:||6 months|
A well established and profitable specialist subcontract component manufacturer providing a range of precision engineering services including CNC Machining, Milling and Turning, fabrication and finishings.
With high profile customers in the Defence and Medical sectors, the turnover at the time of sale was c.£900k with an adjusted EBITDA of c£140k (16%).
There was a small but highly skilled and well trained workforce in place, led by a General Manager (non-shareholding) who has been with the business for 19 years.
The reason for the sale was that the vendors wished to retire, however they were both committed to remaining with the business for up to two years to ensure a smooth transition into new ownership.
With 90% of custom being recurrent from the existing client base, there was significant potential for the new buyer to expand the business through more aggressive marketing.
The sale offered an outstanding opportunity for an engineering business or group of investors to acquire a highly established and reputable company with excellent quality standards, a high profile customer list, a loyal and skilled workforce and a range of valuable specialist equipment.
It also represented an excellent opportunity to acquire a highly sustainable business which had grown its revenues and margins in previous three years despite the challenging economic climate.
What Hornblower Did
We organised a thorough marketing campaign with particular focus on our extensive network of buyers in the engineering sector. Within just 2 months we had generated 35 sales enquiries, 3 of which came in with offers matching our expectation on valuation.
Our Business Sales Consultant, Mark Sykes, was responsible for the sale from start to finish. He qualified the buyers for suitability and funding, arranged individual meetings with the vendors and the selected buyers, and negotiated final offers on behalf of our client.
By establishing the market value for the business, we were able to command the best deal value and sale structure for our client.
Once the preferred buyer was agreed, we drew up a Heads of Terms document and we managed the transaction process until completion.
A sale of 100% of the shares was agreed and it was agreed that the two vendors remain with the business for a short transitionary period.
Appointment to completion took just 5 months.
SOLD – June 2014