|Deal completed in:||11 months|
Well established with an experienced team of skilled CNC engineers and specialist engineering plant, the company has an excellent reputation as a manufacturer of precision components to the most exacting of customer standards. Supplying some of the UK’s leading valve manufacturers, the business had grown its net profitability year on year for the last three years and closed of its financial year in 2013 with 30% EBITDA.
The company had one principal shareholder who was committed to his early retirement but with both of his sons working in key management positions in the business. It was clear that the Vendor was intent on selling to a buyer who would be committed to maintaining the business at its current site rather than a corporate type buyer who might look to integrate it with their current business.
What Hornblower did
After completing the Valuation Report and Sales Memorandum as well as launching the marketing to the appropriate selection of our database of buyers, we also researched the local investment market in the North East of England looking for companies who were committed to making business investments and developing businesses in the North East and who were therefore less likely to make radical changes to the business or move it out of the North East.
We eventually defined a high net worth individual who had stepped down from head of a major North East company in previous years and who now had secured additional resources that were aimed specifically at acquiring and developing businesses in the North East of England.
From the first meeting between this buyer and the Vendor it was clear that there was a strong cultural match between the two individuals and that the Vendor felt very comfortable with the buyer’s intentions to keep the business where it was and to grow it from its current platform.
Throughout the marketing process we had a significant number of interested buyers but as this was a highly profitable business affordability was an issue for many and with the larger buyers who did have the means, as mentioned above the prevailing trend was that our client was less comfortable with the intended approach of these larger companies. It became obvious that the best fit was with the local high net worth individual and we therefore set about agreeing heads of terms which we provided and the transaction was completed three months after completing heads of terms.
As well as managing the transaction to completion Hornblower also managed the due diligence process between lawyers and accountants and saved our client a significant amount in legal fees.
SOLD – MAY 2014