MBO announced at waste recycling systems specialist
Whitham Group Limited (WGL), an assembler and supplier of waste recycling systems, has announced a management buyout of the group.
This has enabled investors introduced by Acceleris Capital to exit with a total return, after EIS tax relief, of almost three times the cost of their original investment.
In 2012, Ben Smart, now the CEO of WGL, approached Acceleris Capital for advice on and locating funding for a management buy-in of Whitham Mills Engineering Limited.
The then family-controlled, Todmorden-based company provided a range of well-known, efficient and reliable bailing systems used in the recycling industry. Smart saw the potential to modernise the business and introduce repeat and recurring revenues.
In July 2013, through a combination of debt and EIS equity, provided as a package by a group of high net worth investors introduced by Acceleris Capital, £1.8m was raised to fund the original MBI and its working capital requirement.
For the year ending February 2020, the turnover of WGL is expected to be about £6m, compared to around £3m at the time of the MBI.
The company has grown significantly, moving to new and larger premises in December 2016 and now employs 27 full-time staff compared to 14 at the time of the MBI.
Since the MBI, contracts have been secured with corporations such as Tesco, JD Sports and DS Smith. The business now supplies 10% of the companies comprising the FTSE100 Index of the London Stock Exchange.
In 2019, WGL entered its 20th year of trading, developing international relationships and building business connections throughout Europe.
It won its largest export order yet for the Italian giant, AMUT Group, the deal coming off the back of a record number of UK sales orders for some of the biggest producers of recyclables in the country.
Smart said: “Our success is due to our various recurring and repeat revenue streams. We see on-going servicing contracts with local authorities and retail companies as a key part of our income.
“This approach initially wouldn’t have been possible without embracing alternative finance through the expertise of Acceleris Capital and their innovative structuring advice which paved the way for the original MBI.
“We are now well placed to build longer-term relationships with a focus on serviceability and delivery.”
Simon Thorn, CEO of Acceleris Capital Limited, said: “We are delighted that the exiting investors in WGL have achieved an excellent return on their investment.
“We are proud and pleased to have been able to advise Ben and his team in their development to date and we wish them all great success for the future growth of the business.”
The management team were advised by Sarah Webster, a senior solicitor in the Leeds corporate finance team at Lupton Fawcett LLP.
She said: “We have worked with the Whitham group since the original acquisition in July 2013, and we’re delighted to have now completed the MBO for the management team.
“The business is now in a great position to go from strength to strength.”
