Warwickshire-based distributor Techsil has completed a multi-million pound buy-in management buy-out (BIMBO) that will enable its directors to continue expanding the business.
Warwickshire-based distributor Techsil has completed a multi-million pound buy-in management buy-out (BIMBO) that will enable its directors to continue expanding the business.
Established in 1989, Techsil distributes products and high-performance liquid polymers, typically used for bonding, sealing or coating applications, to a range of markets across Europe including the automotive, aerospace and medical industries.
The company was previously owned by two major shareholders, founder Mike Luck and sales director Andrew Briars. Following Luck’s retirement, the new managing director, Paul Hughes, has acquired the majority shareholding.
Commenting on the acquisition, Hughes said: “Techsil is the largest European distributor for some of the world’s largest producers of silicone and has achieved significant success through proactively adding value for clients across Europe. We recognise that new product development in our specialist industries can take up to two years before production so we work closely with customers to solve problems and find solutions – resulting in a strong base of committed, long-term customers.”
The Co-operative Bank’s Corporate Banking Centre in Birmingham funded the refinancing deal via senior debt and working capital. Mike Gammon, relationship manager at the bank said: “Techsil has a strong market position and has enjoyed considerable growth over the past 18 years. Andrew Briars and operations director, Mark Lowe have extensive technical and commercial experience of this specialist industry and Paul Hughes brings a wealth of knowledge from his experience of SMEs, largely business to business.”
Hughes added: “The ease of transition has been greatly helped by The Co-operative Bank, their flexibility and speed of response has meant they’ve delivered exactly what we wanted, enabling us to achieve our goal of taking this business forward.”
Mike Yardley, head of banking and finance at solicitors Mace & Jones, advised The Co-operative Bank in connection with the provision by the bank of a term loan and overdraft to assist in the acquisition.
Lead adviser M3 Corporate Finance assisted with the negotiations of the deal, advised on deal structure, secured the necessary finance, and project managed the deal to its conclusion. Matthew Oliver, a director of M3 Corporate Finance, commented: “We are delighted to have helped Paul Hughes acquire the majority shareholding in this leading distributor of silicone products. He is one of a growing breed of entrepreneurs who have climbed the corporate ladder but now want to take control of their own destiny by acquiring a controlling stake in a business.”
Howarth Clark Whitehill was tax adviser to the purchaser, led by corporation tax specialist Trish Sullivan – senior manager at the Cheltenham office. “I was brought in by Matt Oliver of M3 to consider the tax due diligence and to advise, from a tax perspective, on the wording of the Sale and Purchase Agreement, warranties and associated documentation in connection with the acquisition of Techsil,” Sullivan advised.
“The due diligence brought to light a number of tax issues requiring rapid resolution before the deal completed.
“With the new management team in place, the future of the company appears positive.”
The deal was brokered by Diverco and the vendors were advised on the sale by Stafford commercial firm ORJ Solicitors, who were recommended by Diverco. The multidisciplinary team at ORJ was jointly headed by partner Tim Jobson and associate Neil Jones who were assisted by Harj Dhatt and Lorraine Smith.
Jones commented: “The deal involved very different aims for the vendors, two of whom acquired an ongoing stake in the purchaser. We were delighted to have been able to use our specialist skills to help the vendors achieve their varying aims and to reach completion on the original target date.”
Baldwins (Leamington) was accountant/auditor and adviser to the purchaser. Kevin Brevitt of Baldwins commented: “We were approached by Matt Oliver of M3 Corporate Finance, who was organising the banking facilities for the BIMBO, to provide the relevant financial assistance and whitewash for the bank comfort. We worked closely with the in-house accountant in a tight timeframe and have forged a successful relationship with the company to the extent that we have been appointed as auditor to the new owners.”
Law firm The Wilkes Partnership acted on behalf of Techsil, led by partner Kate Hackett. She commented: “Part of making deals like this a success lies in making sure that all acquisition documentation meets the client’s needs. This enables the transaction to run smoothly and meets the primary objective of moving forward with the newly-acquired business. We are delighted to have been able to support Paul Hughes in his business ambitions for Techsil.”
