Finance Wales has backed a management buy-out of Forest Traffic Signals (FTS) from its AIM-listed parent company, Forest Support Services.

Finance Wales has backed a management buy-out of Forest Traffic Signals (FTS) from its AIM-listed parent company.

The finance provider, which is a subsidiary of the Welsh government, supplied £1.05 million as an equity investment to support the buy-out, with additional funding from Centric Commercial Finance.

The buy-out of FTS, which is the only trading subsidiary of AIM-quoted Forest Support Services, is led by brothers Ross and David Williams. They have been involved with the business for more than 15 years, most recently as managing director and group operations manager.

Says Ross Williams, ‘Although we’d seen a substantial increase in our turnover, from £1 million in the year ending March 2001 to £8.8 million in the year ending March 2010, this was never reflected in the company’s market capitalisation or share price.

‘Taking the company into private ownership means we won’t incur AIM-related costs in future and this will significantly improve our profitability and cash flow.’

The Williams brothers acquired FTS using a newly created vehicle called Caswell Support Services, but the business will continue to trade under its original name.

Established in 1968 and headquartered in Newport, South Wales, FTS provides temporary traffic management services for civil engineering projects. It has been trading at close to break-even for the past five years.

Shares in its quoted parent company have been suspended.