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08/12/2015

Finance Wales-backed business buy-outs triple in three years creating and safeguarding 1,380 jobs

More ambitious Welsh managers are becoming their own boss with Finance Wales’ backing and to date the Welsh Government subsidiary has invested £35 million helping them take the helm of 110 established small and medium-sized businesses (SMEs).

These management buy-outs (MBOs), buy-ins (MBIs) and other management succession investments have helped to create and safeguard over 1,380 jobs in Wales.

With demand for management succession funding from Finance Wales having tripled over the last 3 years New Investments Fund Manager, Chris Griffiths believes that buying an established business can have significant advantages and is also good for the future of the Welsh economy.

“The number of Welsh business owners looking to retire or sell up is increasing, so it’s great to see more and more capable managers either buying the business they work for or buying into a business.  This can be an excellent way to become your own boss and often gives aspiring new business owners a head start.

“Established businesses often have loyal workforces and excellent reputations as well as strong customer and supplier bases.  This can provide new owners with a springboard to breathe new life into the business and drive it on to even greater success,” Griffiths explained.

The House Nameplate Company diversifies for growth under new management

A six-figure package of loans from Finance Wales and Natwest recently enabled Tina Smith to undertake a management buy-out of the UK’s largest supplier of house signs and numbers and become its sole shareholder.

The House Nameplate Company (HNP) has been handcrafting house signs and numbers in North Wales for over 25 years and Smith has been its Chief Executive since buying a majority shareholding in 2010.

“The House Nameplate Company has an excellent heritage as well as a skilled, loyal workforce and considerable growth potential.  I’m now putting in place an expansion strategy that will build on these foundations and it’s already opening up a wealth of new opportunities for the company.

“I used my own money to buy into the business back in 2010, but this time I needed additional finance, so I was pleased to work with Rhodri at Finance Wales to come up with a suitable funding package.  He took time to understand our current revenue streams, cost and asset base as well as future aspirations and projections,” Smith explained.

HNP is known for its innovative approach, having launched the original parcel letterbox which can accommodate multiple post and parcel deliveries and Tina’s ambitious plans are already becoming a reality.

With the volume of retail sales seeing sustained year-on-year growth and spending on DIY in the UK at its highest since 2008, HNP has targeted animal lovers with its Pets Made Personal website, launched in 2014, while 2015 has seen the company launch Bespoke & Beautiful, a home and giftware website.

On Screen Productions’ new management team set to build on firm foundations

The senior management team of an established creative communications and production company based in Chepstow has combined personal capital with an undisclosed six-figure mezzanine investment from Finance Wales to buy the business.

New owners, Vikki Byrne, Lydia Owen and Mike Dyson started preparing for the buy-out 2 years ago, taking more responsibility for the day-to-day running of On Screen Productions (OSP) and its life sciences and healthcare division, OSP Healthcare, when existing owners Richard Cobourne and Alison King announced their retirement plans.  They then went on to engage local financial advisers, KTS Owens Thomas, early in 2014.
 
Having worked for OSP for more than 10 years, the team of 3 were keen to expand the agency and win new business.

Explaining why the new management team undertook the MBO, Mike Dyson said: “OSP was originally a corporate video production company set up in 1993 and, since then, it’s grown into a full-service communications agency.  Having worked for OSP for many years, we saw this as a unique opportunity to buy into a business to which all three of us have a deep-rooted commitment.
 
“We used our own finance as well as a loan from Finance Wales to fund the purchase and Alun Thomas ensured that we made best use of our personal funds when structuring the deal.  We now have the flexibility we need to expand the business by capitalising on OSP’s proven business model.”
 
Alison King, the company’s former Managing Director, is staying on temporarily to support the new management team.

Griffiths has seen many of the established Welsh SMEs Finance Wales has backed go on to even greater success under new management.  He believes that the impetus and drive of these managers and management teams will make an even greater contribution to the future success of the Welsh economy.

“Established SMEs are the lynch pin of numerous Welsh communities, many are family owned and they contribute to the long-term sustainability of the Welsh economy. When they expand it’s not only good news for their existing staff, it also creates jobs and new business opportunities for local suppliers.

“Buying a business can be a recipe for success with careful planning and the right funding.  We frequently meet potential owners keen to take the plunge but who aren’t aware of their funding options and that’s where Finance Wales can help.  We’ll work with them to understand the business they’d like to buy and what they want to achieve to come up with a funding package tailored to their needs.”

Griffiths is encouraged by the confidence he sees in Wales’ future business owners as well as their potential to make a big economic impact in future.

Rhodri Evans is an Investment Executive based in North Wales while Senior Investment Executive, Alun Thomas is based in Llanelli.  SMEs wishing to discuss their growth investment needs can contact Alun, Chris or Rhodri on 0800 587 4140.