Buy My Company

If you’re looking to buy a company and replace their management with your own you will enter a process called a ‘Management Buy In’ or MBI.

The difference between a Management Buy Out (MBO) and an MBI is in the position of the purchaser: in the case of the MBO the purchasers are already working for the company. In the case of a MBI however the management is brought in and are, in fact, the purchasers.

Invoice Finance, or factoring, can be a way of successfully funding your MBI.

Read this case study to find out how we helped another business like yours that was going through an MBI.

Deal Type: Acquisition – MBI Industry: Engineering/Manufacturing right of box
left of box bottom of box right of box

Deal type: Acquisition – MBI.

Business sector: Engineering & Manufacturing Supplies.
Turnover: £750K.

This engineering company, a family business based in Reading, has been established for fifteen years. The business sells fastenings, nuts and bolts to the manufacturing, engineering and construction industry. They sell by way of catalogue, online orders or over the phone. If the goods are in stock and the customer is within a 30 mile radius then the goods are delivered the same day. If not then the goods are ordered and sent on next day delivery. While there are many players in this market, this company has built up an excellent reputation within their area over the years due to their wide stock offering and fast service.

The two owners, husband and wife, decided it was time to retire and to free up some cash and while their son relinquished his shares in the company, both the son and daughter would remain in the business as they had built up invaluable expertise over the years and the purchaser wanted to retain this knowledge.

The purchaser was looking to acquire the business by way of a MBI, purchasing the shareholding of the company. The purchaser could see opportunity in acquiring the company. The purchaser had worked in the engineering industry for 10 years, understood it industry well and had vast experience of running a small business.

To fund the Management Buy-In, the purchaser needed not only invoice finance but some unsecured bank lending which we were able to source for them.

Our Solution

We pride ourselves on the relationships we build with our clients – trust and empathy are key to everything we do. That’s why we take the time to really understand a business before recommending our tailor-made solutions. In this instance we sourced a combined invoice finance facility. The combination of flexibility together with local decision making meant we were able to win a deal against a number of competitors and subsequently complete on a deal that looked a lot different on completion day than it did when we first opened a dialogue with the buyer.

When borrowing against a sales ledger, the mix and size of which changes on a daily basis, it is very difficult to know exactly how much can be raised on a future date. This proved to be the case when even as late as the completion meeting itself it transpired that there were insufficient funds available to meet the target purchase price. We negotiated with the lender to take a pragmatic decision to over advance the facility to meet the shortfall and structured a repayment plan to recover these monies.

The Future

With the funding made available to buy into the company, the business has began to expand with another branch opening imminently to further cover the manufacturing and engineering market.