What was the deal?

The MBO of Glasgow-based distribution and logistics specialist Bullet Express. The value was not disclosed, but it was multimillion. We took a majority equity stake, alongside Emerald Capital and Maven Capital Partners. The vendors – David McCutcheon and Gary Smith – reinvested and the MD, John McKail, invested as part of the transaction. Remaining senior management will be incentivised by options. I sit on the opco and the topco board.

How were you introduced to the business?

I was introduced to the company by Ocean Capital at the start of 2023. The process was delayed over the summer, but we completed in October. The business was local to us in Glasgow so we were able to spend time with the management team and get to know them early on, which really helped the process.

Who were the other advisers?

There is probably more diligence in general done at the minute, but there were a few elements to the Bullet business that meant there was more to do than we normally would have. For one thing, it owned its own property outright and had significant leased property assets, so Hardies and J & E Shephard carried out property diligence. It was our first investment in a supply chain logistics business. It’s a large multi-faceted operation, providing global freight management, distribution and storage capability to a pretty diverse customer base, so we had some specific commercial diligence carried out by Granta Strategy and Beverley Bell Consulting. Ocean Capital was the corporate finance introducer; Consilium carried out financial and tax due diligence; and Addleshaw Goddard did the legals. TL Dallas carried out due diligence on insurance, BCN on cyber, Millarise HR on management and Consul-T on health and safety. On the sell side the owners used HnH for sell-side advice, BTO for legals and Cornerstone for tax advice.

What was the attraction?

Ultimately we’re backing a really experienced management team. Two founders set up the business 33 years ago, building it up from two trucks. John McKail joined in 2020 to take it to the next stage, knowing there might be an MBO. Over the past three years the business grew its revenues 38% and diversified services. It now has 155 employees and operates from four sites in the Glasgow area.

The plan is for both organic growth and a buy-and-build strategy. We will utilise the team’s skills and expertise. John has been in the sector all his life, for a long time with Maersk, and has acquisition experience, and the team is very experienced in the sector. The existing debt providers rolled over into the new deal and we will look to them to fund acquisitions on a deal-by-deal basis.

What were the challenges?

I think the current economic environment isn’t helping deals move quickly. So finding an agreeable deal structure was a challenge and needed flexibility on both sides. We had to be creative in how we looked at things on both sides – that’s always a challenge with any MBO, as management teams are often on the buy- and sell-side of a transaction. 

What were the lessons learned?

Three investors were going into the deal, but actually that element worked pretty well, because there was a lot of alignment of interest. It wasn’t as painful as you might think. There are definitely benefits when investing with others, especially where there’s a buy-and-build strategy going on, and you can support a business further. Historically we invested on our own, but investing with others worked out well on this transaction.