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60 second interview - HNP

The House Nameplate Company (HNP) is the UK’s biggest supplier of house signs and numbers and has been handcrafting house signs and numbers for over 25 years at its North Wales workshops.

In 2010 CEO, Tina Smith became a majority shareholder in the business and now owns the company following a second management buy-out earlier this year (2015).

She discusses her experience of buying the business:

1. You’ve been involved in two management buy-outs (MBOs) at HNP, one in 2010 and the other this year. What were the reasons behind them?

In 2010 I was working for the retailer Timpson managing a number of its businesses, including HNP.  At the time, Timpson’s management felt that HNP would benefit from being run by a dedicated owner and gave me the opportunity to buy 61% shares and become the company’s majority shareholder.

More recently, Timpson wanted to focus on its retail businesses and gave me the opportunity to purchase the remaining shares.

2. How did the two MBOs compare?

The two MBOs were very different.  The first time I financed the purchase from my own money, which made the process a lot simpler.  The second time I needed external finance, which meant looking for a funder which could provide me with a suitable funding package.  I also needed to engage with more advisers and legally it was more complicated as the purchase involved assets and property.

3. Did you learn anything from the second MBO?

However much you plan ahead issues you don’t anticipate will always crop up.  You need to ensure your advisers and lawyers are working closely together and that they understand your goal. The process is also much more effective when you’re involved, so don’t take a back seat.

4. How did the company change following the first MBO?

By putting in place a vision for the company, communicating with the staff and management team improved and made it far easier to get the team behind my plans for the business.
HNP was no longer one of a number of companies owned by a larger group, so the staff knew that the decisions I was making were in their and the company’s interests.

5. How would you describe your experience of owning a business?

Owning a business is very different to managing one.  While it’s very positive in terms of being able to make your own decisions and drive the business forward, it comes with a lot of responsibility. You’re building a successful business not just for yourself, but also for the staff working for you.

6. What advice would you give a management team considering an MBO?

Do your homework and make sure you understand the business you’re thinking of buying in as much detail as you can as the devil really is in the detail.  Don’t be put off if you don’t have all the funding in place as there are lots of potential options you can consider, including using the business’ assets to help fund the deal.

If you’re a management team with aspirations to become a majority shareholder speak to Finance Wales today to find out how our funding can help.