Customised Sheet Metal limited “CSM” was Malcolm Pearce in 1992 are a leading player in the manufacturing industry for Sheet Metal Fabrication. From design to fabrication, CSM create a range of custom sheet products, including timeless tailored architectural projects, bespoke warehouse storage and material handling solutions and rotational moulding tooling. They have over 29 years of experience and are a leading player in the industry.
The shareholders Malcolm Pearce and Jonathan Templar wanted to have a succession plan to hand over the baton to ensure that the legacy that they had created was carried forward.
Malcolm and Jonathan were not only the shareholders, but also managed the business on a day-to-day basis. We needed to assemble a management team that the present owners would be confident to hand the reins over to.
How we helped
- We had been working on growth strategies with CSM since 2017. During this we had helped them to double their turnover and profits. To read how we achieved this see CSM growth case study. This put them in a much stronger position for the succession plan.
- In 2018 we explored the various options open including trade sale, management buyout or a long-term gradual succession plan. Malcolm and Jonathan wanted to create a legacy, so ruled out a trade sale.
- Management Buy Outs are less adversarial than trade sales, but still can be very problematical. The present owners can be sceptical whether the incoming team will be as good as them and be able to carry the business forward. The incoming team will be suspicious of what skeletons were in the cupboards of the present owners. What were they keeping from them?
- We mapped out the roles needed to fill the gaps in the management team, including Operations Director, Production Director, Site Director and Managing director. We were fortunate that we already had an excellent Technical Director in place.
- There were stand out candidates for the Operations, Production and Site Directors roles. We agreed Job Roles and Key Performance Indicators for their present roles and mapped out a development plan for each of them.
- We supported and empowered the managers through the Mustard 8 Step Growth Programme.
- We put in a plan that would enable the present owners to have confidence in the new team. We also involved the managers fully in the business so that they had complete transparency.
- The managers were promoted in line with the extra responsibilities they had embraced, ready to take on directorships.
- We identified that we would need to look outside the company to fill the Managing Director role.
- In February 2020 we approached Azets Accountants & Business Advisory in Cardiff for a valuation of the business.
- We worked with Azets to build a model for management buyout.
- We head hunted a Managing Director through our own network and were delighted when Keith David joined us in June 2020.
- We agreed Heads of Terms in November 2020.
- We formalised the management buyout team and agreed shareholdings.
- We appointed Loosemores solicitors and started the legal and accounting and tax due diligence in Dec-20.
- We liaised with the advisers on a daily basis and completed a substantial amount of accounting, finance and legal due diligence ourselves, substantially reducing the costs.
- We completed the MBO in February 2021.
Throughout the process, the two owners and six new directors worked in harmony and unison as one team of eight to achieve the smooth transition.
This was particularly important in the final stages where both sides can get adversarial in the legal details and the warranties and conditions in the Sale and Purchase Agreement.
We assisted in putting together a communications plan to communicate to all stakeholders, including staff communications and 121’s, suppliers and customers and press releases.
The reaction to the MBO was universally positive. The staff, supplier and customers have every confidence in the management as they had already established great relationships with them and were reassured that present owners were going to stay in business in new roles.