MBO will result in engineering business leaving AIM

THE management team at engineering business SWP Group plc has acquired it in a move that will see it exit the AIM list of the London Stock Exchange.
The deal, led by chairman Alan Walker, sees new company Friars 716 Ltd take over the business, valuing it at £18.3m.
The team includes current SWP directors Colin Stott, David Pett, and Martin Bell.
Management already own 30.2% of SWP and the offer is being supported by a further 26.9% of the other SWP shareholders all of whom will be accepting the offer.
In 2015, turnover for the company dropped 15% to £13.2m, but pre-tax profits increased to £1.7m from £1.2m in 2014, though after discontinued activities were included, this came to a £400,000 loss.
It got rid of loss-making businesses during a year which Mr Walker described as “very challenging” and “frustrating”.
The Cambridge-based business has operations in Telford as well as Sheffield and Rotherham. It develops solutions to prevent corrosion under insulation through ULVA and syphonic rainwater management systems through Fullflow.
Alan Walker said: “SWP is too small to benefit from maintaining a public quotation and AIM has not provided SWP’s shareholders with sufficient liquidity, with some feeling trapped. As a private company, SWP will be better able to weather the feast and famine nature associated with transacting a small number of large projects.
“I therefore believe that the Offer is in the best interests of shareholders as a whole and I look forward with great optimism to working with all stakeholders to continue the successful development of the business.”

The deal involved several Midlands advisory firms. Friars 716 was advised by Cattaneo LLP (themselves advised by Gateley) and Orbis Partners, Mills & Reeve and Smith and Williamson.

HSBC has provided funding to Friars 716 and they were advised by Pinsent Mason with Mazars undertaking financial due diligence. SWP Group is being advised by Whitman Howard and Addleshaw Goddard.

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