Synseal MBO ‘could signal deals revival’
DEALMAKERS were celebrating today what may be the largest deal completed in the West Midlands for more than a year.
Birmingham-based Catalyst Corporate Finance and the Midlands team of Yorkshire Bank advised on the management buy-out of Synseal Extrusions Limited, backed by H.I.G Capital whose total funding into the deal amounted to £30.5 million.
The total size of the deal is “considerably more than that,” TheBusinessDesk.com was told this morning.
Founded in 1980, Nottingham-based Synseal is the UK’s leading manufacturer of conservatory roof kits and extruded PVCu profile for window and door systems. It reported sales of £76 million in 2009.
A member of Birmingham’s deal-making community said: “This is a very promising sign indeed that things are moving again. The deal originally failed two years ago, but a lot of hard work involving lots of West Midlands firms and advisors has achieved a great result.
“This is a firm in a tough consumer sector affected by the recession. To get this kind of result can only mean good things for deal makers and advisors in the region.”
Following previous attempts to sell the business by other advisors, Catalyst found a new CEO to lead a management buy-out from the business’s founder Gary Dutton MBE.
Catalyst introduced David Leng to the business in late 2008, and then worked with private equity firm H.I.G. Capital to secure a debt package put together by the Midlands based team of Yorkshire Bank. This, along with more committed funding from H.I.G will support Synseal’s operational improvement programme as well as the company’s organic and acquisitive growth plans.
Keith Pickering, partner at Catalyst commented, “I am delighted that our process has delivered the objectives of all the parties. Management were central to the decision making process of the deal and chose their preferred funders. The vendor secured the deal he wanted and H.I.G were allowed an “Access All Areas” and exclusive diligence process necessary to support the agreed deal in a challenging trading and banking environment. An old-fashioned buy-out which allowed us to demonstrate the core values of Catalyst – experience-led, quality advice which gets a deal done”.
David Leng, Chief Executive commented, “We are very excited to be driving Synseal through its next period of growth. We can see some great opportunities for ourselves and our customers in a fragmented window and conservatory market. None of this would have happened though without Catalyst’s practical advice, their knowledge of the private equity market and ability to deliver the agreed deal despite the wider economic climate at present”.
Paul Canning, managing director at H.I.G., said: “We are very pleased to announce our investment in Synseal, a best in class business led by an excellent management team. We believe that with the resources we bring, coupled with this team, Synseal is well placed to drive consolidation in the market and to harness its position as a leading supplier in the UK.”
Ian Howey from debt provider Yorkshire Bank commented, “Gary Dutton has built up an impressive and market leading business. The strong MBO team are highly regarded and have significant industry experience which gives them a platform to take the business to the next level.”
Synseal supplies more than 700 independent window and door fabricators and installers across the UK and employs more than 500 people.
