Selling My Manufacturing Business
If you have decided the time is right to sell your manufacturing business, read on for all the key information and guidance that needs to be considered as you put your exit strategy in place.
For more than a quarter of a century we have helped many shareholders achieve their goal to sell a manufacturing company, building up vast experience in the processes involved and becoming established as the UK’s leading business sales adviser.
How to sell a manufacturing business
1 Market valuation of your business
We consider all the important factors that will influence the valuation of your business, analysing the company’s financial profile and outlook whilst also considering the equivalent values that have recently been achieved in your sector.
2 Business negotiations
Striving to achieve the highest possible value for your company requires negotiations which can be any combination of tough, delicate and diplomatic. We have considerable experience in negotiating with buyers and striking the right balance to ensure you emerge with the result you are seeking.
3 Due diligence
An integral part of a business transaction, due diligence will be undertaken by the acquirer to check the financial picture of the company has been presented accurately. We can assist if you want to precede this by conducting your own due diligence process and with the drawing up of confidentiality agreements.
4 Management of assets
In the manufacturing industry, fully functioning machinery and equipment are essential to preserving a company’s value. Ensure all maintenance checks are up to date and safety certificates easily accessible.
5 Letters of intent and final sale
A variety of legal documents underpin the process when you sell a manufacturing company, but you needn’t worry about becoming bogged down in paperwork and red tape because we can oversee all those aspects of the transaction, leaving you free to focus on running your business to best effect.
Why sell a manufacturing business?
Shareholders often have their own individual reasons for selling a business, perhaps personal to them in the sense of having decided the time is right to retire or embark upon a change of lifestyle.
Maybe an opportunity has arisen to launch a new project and therefore capital, from the proceeds of the business sale, is required to fund that.
But there may be other factors at play. Profitability projections need to be taken into account, which could be subject to factors such as potential supply chain disruptions and the impact of the global economic outlook on the value of sterling and consumer confidence.
How to value a manufacturing business
Whether the criteria for the valuation is based principally upon your company’s financial performance or comparisons to previous acquisitions in the sector, it is always worth bearing in mind that the business is only truly worth what someone is prepared to pay for it.
Of course, determining a valuation for your business is part of the service we provide at KBS Corporate, and we will start by identifying ‘value drivers’ that catch the eye of potential acquirers and trigger an appetite within them to buy your business.
6 steps to increase the value of selling your manufacturing business
Manage hard assets
This means maintaining the entire look of your business to ensure it is displayed as attractively as possible to potential buyers. Besides checking all facilities are functioning to optimum performance, make sure company vehicles and even signage represent the company in the best possible light.
Maintain innovation
A clear roadmap for the future direction of the business is desirable to an acquirer. They will want to see growth plans that have been clearly thought through and are eminently achievable, leading to a seamless handover to buyers who will not be as familiar as you with the potential of the business.
Compliance with regulation
There should be no loose ends that need tying up in terms of regulatory compliance at the time you sell your manufacturing business, so make sure all checks have been carried out in the appropriate timeframe and that lease agreements, contracts and other legal requirements are up to date.
Steady revenue
A healthy cashflow running through the company is highly important for it indicates the strength of how the business is performing. It also reduces the need for the buyer to inject a sizeable amount of working capital and therefore increases your power in negotiations over the eventual sale price.
Ensure finances are in order
One of the key aspects here is stock control, ensuring as much as possible of what you produce is being manufactured to order and that there is no excessive surplus of raw materials. Business buyers will not want to pay for anything they deem unnecessary, so running a tight ship will enhance the financial picture.
Obtain an accurate business valuation
An informed idea about the valuation of your business is crucial when embarking upon a sale. The hard work you have put in should be rewarded, but the valuation also needs to be realistic. With our years of experience in this area, we are ideally placed to advise you on striking the right balance.
Expert support when selling a manufacturing business
Example 1: KBS Corporate advised on the sale of Serene Stone Ltd, a Nottinghamshire-based quality cast stone products manufacturer.
The acquirer was Nene Capital, an SME investment specialist which maintains an active role in commercial operations to support the delivery of strong financial outcomes.
Read more about the sale of Serene Stone here: Nene Capital acquires Cast Stone Specialist
Example 2: KBS advised on the sale of Eagle Plastics Ltd, a Leicestershire-based supplier of thermoplastic sheet materials with UK-wide distribution capabilities.
The company was bought by Plastribution, which integrated Eagle Plastics’ sheet business into its product division and retained the company’s workforce at their existing premises.
Read more about the sale of Eagle Plastics here: Eagle Plastics sale overseen by KBS Corporate
Recent Business Sales In The Manufacturing Sector
Datalink Electronics Ltd
Mariam Smith, Managing Director of Datalink Electronics, has spearheaded a management buyout (MBO) of the Loughborough-based company, with the help of KBS Corporate.
Datalink Electronics was established in 1983 and provides a wide variety of integrated design and production services to a broad customer base ranging from multinational PLCs to start-up businesses.
The two shareholders, Eric Luckwell and Ian Wilson, decided the time had arrived for them to retire and instructed KBS to orchestrate a sale process, during which it became clear that an MBO led by Mariam would be the ideal solution.
Fabio Rambelli, KBS Corporate Associate Director who oversaw the transaction, said: “Mariam had a very active management role and was gradually taking over an increasing number of responsibilities from the shareholders, which meant she was the perfect person to sell the business to.
“I’m happy the MBO completed as Mariam is absolutely the best person to take over the company.”
In their announcement of the deal, Datalink heralded the MBO as “a pivotal move that signifies a new era” for the business and “a catalyst for strategic evolution”.
“Having effectively run the company for the past 12 months, Mariam emphasises the infusion of new talent, machinery and a streamlined structure,” Datalink’s statement said.
“The MBO brings more autonomy, allowing Datalink to focus on key areas such as talent acquisition and investment in equipment. This new-found independence is set to redefine the company’s strategic direction, creating a dynamic and responsive organisation.
“The post-buyout strategy includes exploring new partnerships and collaborations that align with Datalink’s growth objectives, reinforcing the company’s commitment to innovation and excellence in electronic design and manufacturing.”
Fabio Rambelli added on behalf of KBS: “I would like to thank Eric, Ian and Mariam for their hard work on this transaction and for working with us. I wish all parties the very best in the future.”
Datalink Electronics Ltd
Sector: Electronics
Location: Leicestershire
Buyer: Management Buyout
Ready to talk about your business requirements?
Give us a call on
+44 (0) 161 258 0118 or contact us now to get started.
Datalink Electronics Ltd
Sector: Electronics
Location: Leicestershire
Buyer: Management Buyout
Law Print & Packaging Management Ltd
Stockport-based Law Print & Packaging Management Ltd (“Law Print”) has been sold to South East Asia’s leading fully-integrated packaging manufacturer in a deal overseen by KBS Corporate Finance.
Law Print offers extensive packaging solutions services worldwide, from design, printing and quality assurance through to international logistics management.
Law Print works with a global network of accredited packaging manufacturers and suppliers, with pet food packaging being one of its specialist areas of expertise.
The successful acquirer is SCG Packaging (SCGP), a company listed on the Stock Exchange of Thailand with a comprehensive and diverse portfolio of more than 120,000 different products including retail display packaging, grocery bags, medically related items and labware.
The transaction was made through SCGP Solutions (Singapore) Pte, a wholly owned subsidiary of Bangkok-based SCGP, and will expand SCGP’s sales channels and customer networks with a focus on the premium market of fast-growing pet food manufacturers in the UK and across Europe.
Further synergies include the cross-selling of other SCGP consumer packaging products to multi-national clients with which Law Print has a long-term association.
Law Print’s owners Tim and Morven Law commissioned KBS Corporate Finance for the sale of their business and were advised by John Hunt, Corporate Finance Director, and Annie Pritchard, Corporate Finance Assistant Manager, along with Gateley Legal and Holly Bedford, K3 Tax Advisory Managing Director.
Tim Law, founder and shareholder of Law Print, commented: “At the start of this process, we set out with a clear intention to find a purchaser who could bring significant synergies to the table. I am convinced the depth and knowledge that resides within the SCGP Group will ensure further growth and security for Law Print and its tremendous team in the future.
“After nearly two decades of trading autonomously, this marks the commencement of a new and promising chapter. It will be business as usual for Law Print as we maintain our current management, operations, customers and brand identity.
“However, this deal will further support the company’s continued growth with an enhanced product offering and new market development, whilst helping drive SCGP’s expansion into the UK, Europe and North America.
“The union between our businesses presents a host of exciting synergies and benefits to our existing and new clients. These include an enhanced product portfolio, heightened sustainable practices to which SCGP and Law Print are hugely committed, and expanded reach which enables us to explore further into North America to a more diverse and extensive customer base.
“This collaboration is set to expedite our mission to deliver pioneering, forward-thinking flexible packaging solutions.”
John Hunt and Annie Pritchard of KBS Corporate Finance expressed how much they had enjoyed working on the transaction.
“Tim, Morven and the entire Law Print team have been great to work with over the course of our engagement,” said John. “The deal provides for a full exit for Tim and Morven, enabling them to spend more time with family.
“Under Carole Bayne’s continued leadership with support from SCGP, we are more than confident Law Print has a very bright future ahead.”
Law Print & Packaging Management Ltd
Sector: Printing and Packaging
Location: Greater Manchester
Buyer: SCGP
Ready to talk about your business requirements?
Give us a call on
+44 (0) 161 258 0118 or contact us now to get started.
Law Print & Packaging Management Ltd
Sector: Printing and Packaging
Location: Greater Manchester
Buyer: SCGP
Chiltern Solar Ltd
Solar panel installer Chiltern Solar Ltd has been sold to environmental and ecological services company Agrivert in a deal overseen by KBS Corporate.
Chiltern Solar, based in Chesham, Buckinghamshire, specialises in the design, supply and installation, around London and the home counties, of solar photo voltaic (PV) systems which generate clean and efficient energy for households and businesses.
Directors Steve and Julie Gamston instructed KBS Corporate to preside over a sale of their business, which they founded in 2011, to facilitate their retirement plans, believing they had taken the company as far as they could and that the timing was prime for a larger corporate entity to continue the growth.
Agrivert was identified as a suitable acquirer in its desire to diversify its service offering. The Chipping Norton, Oxfordshire-based company, founded in 1994, is an award-winning provider of organic waste management solutions, operating recycling and renewable energy plants both in the UK and internationally.
Luke Rae, the KBS Corporate Deal Executive who oversaw the transaction, said: “Chiltern Solar is a magnificent business at the forefront of renewable technology. The acquisition by Agrivert will allow continued development in a high-growth sector whilst continuing high standards of customer service and environmental protection.
“The business will provide a further sting to Agrivert’s offering and allow them to enter a new sector whilst also maintaining the high standard of services they offer.”
A transition period will now take place during which Agrivert will integrate Chiltern Solar’s operations team and processes into the wider group and allowing, in time, for Steve and Julie Gamston to retire.
Steve Gamston said: “Julie and I are very excited that Chiltern Solar is joining forces with Agrivert for the next chapter of business growth and expansion. This strategic move opens doors to new resources, expertise and opportunities and will enable the business to extend its reach and increase its impact in the solar PV marketplace.
“Our decision to sell Chiltern Solar was made with confidence in Agrivert’s commitment to upholding our values, their proven track record in the renewable energy sector and their vision for continued growth and success.”
Phil Earl, chief executive of Agrivert, added: “Expanding our capabilities into other forms of renewable energy is an important next step for the group as we continue to grow.
“This acquisition allows us to widen our customer base but also enables us to bring new solutions to our existing customers and opportunities for our staff.
“We have been very impressed with Chiltern Solar’s growth in recent years, their capability and expertise in solar PV and we look forward to accelerating that as part of Agrivert.”
Chiltern Solar Ltd
Sector: Renewable Energy
Location: Buckinghamshire
Buyer: Agrivert
Ready to talk about your business requirements?
Give us a call on
+44 (0) 161 258 0118 or contact us now to get started.
Chiltern Solar Ltd
Sector: Renewable Energy
Location: Buckinghamshire
Buyer: Agrivert
Speak to our expert team on 0161 258 0118 to arrange a consultation
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