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24/09/2014

Finance Wales investments help the next generation of Welsh business owners create or safeguard 1000 jobs

Loans and other investments from Finance Wales are providing the next generation of Welsh business managers with the backing they need to buy established small and medium-sized businesses (SMEs).

Established SMEs make a significant contribution to the Welsh economy with Finance Wales backing 91 businesses with over £29 million of succession investment enabling ambitious management teams to take over the reins at established Welsh companies.

Thanks to the aspirations of their new management and Finance Wales’ backing, these businesses have created and safeguarded over 1,000 jobs in Wales.

Chris Griffiths, New Investments Fund Manager at Finance Wales specialises in succession investments and he believes that acquiring an established business is an attractive option:

“An estimated 1 in 5 business owners in Wales have run their business for over 20 years and increasingly many are considering how to realise the value they’ve worked hard to build up over the years. This is good news for aspiring and ambitious Welsh entrepreneurs and management teams because there are more acquisition opportunities available to them.”

Having seen a significant rise in these types of deals in the last year, Griffiths is keen to encourage even more owners and managers to consider their options.

“Passing the baton can be a great way of ensuring continuity in a business. If well managed, the current owner can benefit from years of hard work, while the new owner can inject new impetus into the company and create more value from their investment. Finance Wales can provide existing managers thinking of a management buy-out, or those looking to buy into a business, with a funding package tailored to their individual needs.”

Redwood Hire & Sale Services, Bridgend

When the owners of Bridgend-based environmental and drainage consultancy, Redwood Environmental Services Ltd  (Redwood) wanted to step back from running the business in 2004, they recruited Operations Director, Rob Hatton to manage the company.  Between 2004 and 2014 Mr Hatton successfully expanded Redwood and more than quadrupled staff numbers from 5 to 22.

With a £190,000 loan from Finance Wales coupled with investment from RBS, Mr Hatton recently completed a management buy-out (MBO) to become Redwood’s majority shareholder.

“Redwood has evolved and grown considerably in the last ten years.  We’ve entered new markets, upgraded our facilities and expanded our UK customer base.   I was keen to undertake an MBO so that I could continue implementing the company’s long-term growth strategy.  Finance Wales’ investment was instrumental in enabling me to do this.  The market for Redwood’s services is  growing and it has considerable potential for further expansion,” Mr Hatton explained.

Anchor Computer Systems, Bangor

Managing Director of Anchor Computer Systems (Anchor), Mike O’Sullivan received a £750,000 succession loan from Finance Wales to support the transition from shareholder to majority shareholder in 2014.

“Anchor has been providing high-quality, bespoke collections software for over 30 years. In 2012 with Finance Wales’ flexible backing I was able to begin the process towards a management buy-out which was concluded earlier this year.  Now with a strengthened management team and a robust operating model in place we’re confident we can continue expanding,” explained Mr O’Sullivan.

Teddington Engineered Solutions, Llanelli

A long-established engineering business based in Llanelli, Teddington Engineered Solutions (TES) is a leading UK manufacturer of metal expansion joints for high-profile names such as Rolls Royce and Caterpillar Group.

TES’s Commercial Director, Paul Greenwood combined a £500,000 loan from Finance Wales with additional finance from Barclays to recently acquire the company and now plans to boost its workforce by employing a further 10 staff.

“TES has a long heritage. It grew out of three smaller manufacturers, one of which was established in the 1920s, and has also been the subject of a previous management buy-out.  We’re going to continue growing the company, firmly establishing it at the forefront of bellows and expansion joint manufacturing.  Finance Wales’ investment was crucial to funding the acquisition and strengthening our financial position,” Mr Greenwood explained.

Griffiths is keen to point out that Finance Wales is eager to back more succession investments such as these and can tailor its funding to suit individual managers and management teams.

“Many Welsh managers who would like to own their own business are often unaware of the funding options open to them and we’re keen to help them understand how an investment from Finance can help them achieve their ambitions,” Griffiths concluded.