We are delighted to have advised Precise Component Manufacture on their management buy-out (MBO).
A fast-growing precision engineering firm looking to achieve an MBO in order to exit the current private equity investor and majority shareholder.
We were engaged to undertake financial and taxation vendor due diligence (VDD) in respect of Blauvelt Capital Partners' disposal, with particular emphasis expected on the real underlying EBITDA of the business and what normal working capital was. The task was complex for several reasons:
- The Group operates in a specialist area of CNC manufacturing oriented towards biotech capital equipment; demand for which surged during Covid-19 requiring analysis of normalised trading.
- Multiple acquisitions over the review period meaning work was required to identify the real underlying trading and working capital position.
- The machine monitoring technology developed by the Group’s which added value to the manufacturing process was new and bespoke.
- Lengthy vendor due diligence (VDD) process due to the impacts of Covid-19 which would require significant top up work to ensure the process continued to be well managed.
By providing VDD services, we enabled the Group to showcase its unique qualities from a manufacturing perspective whilst facing a robust challenge to its historical and forecast performance
We supported and challenged the MBO team through difficult and complex conversations with potential buyers throughout the process, before the focus could move to the leading private equity bidder.
Ultimately, 12 months after completing the date of the initial VDD report, the MBO was successful, supported by Total Capital Partners. The exiting shareholder and private equity investor were able to realise a successful exit, whilst leaving the Group to continue to grow in the hands of an experienced and enthusiastic management team.
Mo Merali, Jon Stubbings, Manny Alam, Sam Phipps and the entire Grant Thornton team provided outstanding support in tough market conditions. It was a lengthy journey, but perseverance and the underlying quality of the business paid off.Roddy Cruz Managing Partner, Blauvelt Capital Partners