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23/06/2017

Finance Wales supports over 130 companies through succession

Fourteen companies have been supported through succession deals by Finance Wales since April 2016, bringing the total number of deals of this type completed by the company to 136. Investments for the 136 deals total £43.8 million.

From BIMBOs (buy in management buyouts) to MBOs (management buyouts), a range of different deals have been facilitated by the investment company. Finance Wales launched its Wales Management Succession Fund in April 2016, but can also facilitate deals through other funds.

With an ageing business owner population the topic of succession has become ever more important. Finance Wales works with advisers and sector specialists advocating the benefits of creating a detailed succession plan.

“Developing the second tier of management and having a properly prepared succession plan increases options for owners and ultimately will help deliver them maximum value,” explained Finance Wales’ New Investments Fund Manager Chris Griffiths. “My advice to anyone considering retirement options would be to engage early with trusted business advisers and allow plenty of time in order to ensure a managed transition to managers. This can take up to three years so it’s never too early to start planning.”

Cole Contractors

Recent deals include the MBI (management buy in) of Cole Contractors. An MBI is where an external candidate or management team acquires a business, replacing the existing management team.

 The road maintenance company came up for sale when the previous business owner Steve Nichol decided to retire. Having tracked the business over a number of years, new owners Ian and Stephen Vickers were presented with a timely opportunity to buy the company; adding to their portfolio of businesses which includes Diamond Discovery and Eurologo.

“Cole Contractors has successfully been providing quality road maintenance services in south Wales for over 20 years. With a stable client base, good pipeline and strong management team Cole Contractors is a great business" explained the brothers.

“Ian and Stephen Vickers are experienced managers and their desire to buy into the company was perfect timing, allowing the previous owner to exit seamlessly whilst securing the future of what is a very successful business,” added Investment Executive Ruby Harcombe, who structured the deal on behalf of Finance Wales.

Wales Management Succession Fund

This year also saw the first deals from the Wales Management Succession Fund. One of the first deals was an MBO for communication company Glamorgan Telecom.

Managing director and majority shareholder Kelly Bolderson of Glamorgan Telecom, together with members of the senior management team, bought out founding director Neal Pughe’s stake to bring the company under the full control of the current board.

The move enabled the company to refinance its existing debt, complete a multi company MBO and saw Finance Wales take a 15% equity stake in the group after providing the financial support needed to complete the process.

Kelly added: "This really is the beginning of a new and exciting journey for the business and we thank Finance Wales for their help and support during this process. With a full buyout in place, the management team has full control to guide Glamorgan Telecom into an exciting new chapter. “

 

For more information on support Finance Wales can give, visit www.financewales.co.uk or call 0800 587 4140.