When the vendors of a business are set on a trade sale, it takes compelling arguments to persuade them otherwise. Brian Bollen looks at the sale of Abbey Logistics, whose advisers, EY, found that a NorthEdge-backed MBO was the better route to take.
For NorthEdge Capital, taking no for an answer was not an option. Jon Pickering, director at the private equity (PE) firm, which mainly focuses on investment opportunities in north-west England (and last month opened an office in Birmingham), persisted until he got an audience with management and the vendors of Abbey Logistics.
At the end of 2015, NorthEdge was made aware that Abbey was coming to market. Steve Granite, 36, had been CEO of Abbey for six years, having worked for the business since he left school at 16. He had a small stake in the business and had persuaded the founding Lucy family to let him buy it.
EY was appointed to test both trade and PE appetite. Initially trade, rather than PE, was the exit of choice of the vendors. “Abbey has a reputation of going the extra mile, which has led to continued growth and expansion since its formation in 1990 by the Lucy family,” said Mark Clepham, executive director in the corporate finance team at EY, who led the team advising the vendors. “Over the past five years the company has seen strong growth following a number of acquisitions and large contract wins. It was important to find the right buyer for the founders so that the existing management team were able to continue to drive the company forward.”
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