Aluminium and plastics extrusion business BWC Group has completed a management buyout (MBO) in a deal led by Fortus Business Advisors.
BWC Group produces goalframes for small-sided football goals, as well as aluminium profiles for a range of industries. The company has been trading for more than 20 years and the move will allow the phased retirement of founding shareholder Guy Barker.
The MBO was led by finance director Mark Barker and operations director Danny Varley.
Guy Barker said: "I’m pleased everything ran smoothly and am more pleased that Danny and Mark now have a great opportunity ahead of them."
Lead advice was provided by Mark Standish and Patrick Faughnan of Fortus Corporate Business Advisors. Legal advice to the vendor was provided by Mark Archer of Maddox Legal and the management team was advised by Laura Taylor of Freeths.
An Interview With Fortus
How long have you been working with BWC Group, and how did you advise them on this acquisition?
We have been working with BWC Group for nearly four years, helping them with their business strategy as they reorganised their businesses onto a single site in 2019. As part of our strategic work with Guy Barker, we advised him on his succession and retirement options, which led to the MBO transaction.
What sort of factors need to be considered when working on an MBO?
The key factor for making an MBO work is a motivated and ambitious management team who are prepared to take risks to develop the business further. In Mark and Danny, there was the ideal combination. The business also needs to be profitable and with good future potential, so that a deal can be structured.
Did your team face any challenges? If so, how did you overcome them?
There were some structural changes that needed to be dealt with before the transaction could proceed, and this was managed in a logical and tax-efficient manner working closely with Guy.
What are your first priorities when taking on a deal like this?
It’s important to understand that the wishes of the owner are aligned with that of the management team at the outset, and that everyone knows their role. An MBO can easily fail if there is not a full understanding of the opportunity and the risks at the outset.
How do you ensure that there are no pitfalls in the early stages of an acquisition?
Regular meetings, taking time with all parties to clarify full understanding, and making sure that concerns are heard and addressed.
What are your tips for ensuring that an MBO is completed successfully?
Owners should explore the MBO option as part of their succession planning as early as possible. This gives time to build the team and assess the viability alongside any other considerations.
Use experienced corporate finance advisors who will explain the pitfalls and opportunities, and then guide you through the whole process.
Finally, make sure you also use lawyers who are experienced in these types of corporate transactions, so that they can provide expert support and guidance navigating the legalities of the deal.
