KBS Corporate advise on the acquisition of Compubyte Systems Limited

Compubyte Systems Limited has been acquired by the LDD Group Limited for an undisclosed sum, assisted in negotiations by KBS Corporate, Bolton based specialist in company sales and brokerage services.

Established in 1999, Compubyte, based in Cullingworth near Bradford in West Yorkshire provides a full range of I.T. services to Primary Schools in the West Yorkshire/Lancashire areas including I.T. maintenance, installations and also the leasing of I.T. equipment.

The acquirer, LDD Group Limited, based in nearby Horsforth near Leeds, was established by Ian Sellars and Paul Hartley in 1993 and provides tailored I.T. hardware, software and integrated services to public and private sector companies across the UK. LDD are the outsourcing provider to local government departments, NHS Foundation Trusts, local manufacturing and education establishments. 

The acquisition of Compubyte will enable the LDD Group to grow their service offering in the Educational sector, adding to their 20 strong employee base and £10m annual turnover.

Full terms of the deal have not been disclosed for the acquisition which completed on 30^th April 2013.

Deal executive Tom Eatough of KBS Corporate who was integral to the sales process comments “LDD Group is a well suited acquirer for Compubyte and I am delighted that we managed to agree a deal.  It was a pleasure to work with Bill & Elaine and I wish them the best for their impending retirement.”

KBS Corporate Advise on the Acquisition of Logictrans UK Limited

KBS Corporate has helped to negotiate a deal for Logictrans UK Limited based in Leigh, Lancashire, which was sold to EFS Group based in Burnley, Lancashire on March 27^th 2013 for an undisclosed sum.

Logictrans UK Limited is a freight forwarding company that specialises in customs clearing and was formed in 2004 as the UK office of a US based operation. At this time, there were three UK based directors, which further reduced to two in 2006, cutting all existing ties with the U.S. Since its inception, the business has traded well with strong sales and good profit margins, in spite of the prevailing economic climate.

The acquirer, EFS (Express Freight Solutions) Group based locally to Logictrans in Burnley, Lancashire, are an ambitious logistics company with an annual turnover in the region of £6m. After more than a decade of organic growth, the company has embarked on a strategic acquisition programme to rapidly expand its business including the acquisition of 747 Express Freight in 2010 and Refrigerated Transport Services in 2011.

The recent acquisition of Logictrans UK will help to further develop their customer base and service proposition.

KBS Corporate is based in Bolton, Lancashire and specialises in company sales and brokerage services. Tom Eatough, Deal Executive at KBS Corporate who advised on the sale comments “I am pleased that we managed to agree a deal which suited Neil & Jeanne whilst enabling EFS Group to expand their service offering.  It was a pleasure working with Neil and I wish him and EFS the best of luck with their future endeavours.”

Breaking News As KBS Corporate Announce the Sale of JHR Educational Ltd

KBS Corporate, Bolton based specialist in company sales and brokerage services, has assisted in negotiations to complete the deal for JHR Educational Ltd, trading as Playground Basics, which sold to Demco Europe Ltd on March 1^st 2013 for an undisclosed sum.  

Demco is part of the £23 million turnover Wall Family Europe Group, which in turn is part of USA based Wall Family Enterprise, which operates through eight subsidiaries and generates a combined annual revenue of nearly $200 million. 

A market leading library and educational resources distribution company, Demco operates through a number of prestigious brands including  Gresswell, Storysack, LFC, Demco France, Demco Interiors, Articles of Faith, Demco Germany, StartRight, and Boo Zoo.

Using its extensive experience, the company works with a wide range of professionals across the globe providing solutions in public, educational, academic and commercial sectors. Their ultimate vision and objective is to become the preferred specialist product and service supplier to all libraries, universities, colleges and schools across Europe.

Playground Basics is a trading name of JHR (Johnson Haigh Rogers) Educational Ltd with an annual turnover of £1.7m. The company provides a comprehensive and unique range of learning resources for nurseries and primary schools. Their exclusive designs, manufactured using the latest digital technology will ensure that the Playground Basics brand of Demco will perfectly compliment the other brands available.  JHR will gain the advantages available under the cloak of a larger parent group including access to larger contracts and supplier channels and aggressive expansion into other as of yet untapped markets. The investment provided as a result of the acquisition of JHR will ensure its continued growth and development.

Key to negotiations was Matthew Clancy, Operations Director at KBS Corporate.  Matthew comments “I am delighted with the overall deal structure obtained for our clients, offering them the exit they so desired, and the necessary investment to take the company to the next level, continuing to build upon its existing success and outstanding industry reputation.

Is Now the Right Time to Sell Your Business?

The only person that can ultimately decide on the timing of a sale is you, the company owner, and this often depends on your individual circumstances.

Key factors you may wish to consider:

1. Tax (Entrepreneurs’ Relief)

The current tax regime dictates that now is the most tax efficient time in recent history to sell your company. Under Entrepreneurs’ Relief, many sellers who meet the qualifying criteria are now paying only 10% Capital Gains Tax compared with previous rates of up to 40%.

2. Cash Rich PLCs

It is reported that UK PLCs are currently sitting on a £64 billion treasure chest of excess cash and working capital. KBS Corporate specifically and proactively target such companies who have the financial capability to acquire your company.

3. Overseas Buyers

The significant capital investment and timescales involved in an overseas company establishing itself in the UK can make acquisition an attractive alternative. Overseas investment in UK companies is up 39%*. *Q1 2012 vrs Q1 2009, Source Office of National Statistics.

4. Growth Objectives

Many companies have struggled to achieve organic growth in recent times due to the challenging economic environment. Companies have turned to consolidation, diversification and strategic acquisitions in order to satisfy their growth targets.

5. Proven Demand

Over the past 12 months, KBS Corporate has experienced an increase in buyer registrations by 160%, formal offers received by 87% and agreed sales and completions by 52%.

6. Funding and Availability

Investors, Venture Capitalists, Private Equity Houses and Regional Development Funds have been inactive in recent years due to the uncertain market conditions. Many have now returned to the market causing a ‘spike’.

Test the Market Service

Unsure what interest your company will attract?

KBS Corporate offers a bespoke 'Test the Market' service allowing you to assess the level of interest that your company would attract from prospective purchasers and indicate how much it might be worth, before you commit to a full sale.

We will confidentially approach the market on your behalf (ensuring your company name and details are never disclosed) 
and provide you with a full report, detailing the response from the marketplace.

Key benefits of our 'test the market' service:

• Complete confidentiality – Safeguarding the ongoing interests of the company
• Taking advantage of industry activity – “Is the timing right?” High levels of interest in your sector at present could mean now is the time to consider a full disposal
• Cost advantages – A low cost way of gauging buyer demand before deciding if an outright sale is right for your circumstances

If you would like to consider this approach, our service will include:

• High level research and a target buyer list produced and contacted
• An approach to our professional contacts to determine if there is an appetite from strategic and financial purchasers
• The opportunity being discreetly listed on acquisition platforms and forums
• The opportunity being matched against our vast database of retained buyers
• The opportunity being marketed on specialist company sale web portals to attract 'active' buyers
• The filtration and vetting of responses and Non Disclosure Agreements to determine the quality of prospects and their ability to fund a transaction
• A market appetite report detailing the level of activity and interest that exists, allowing you to make an informed decision as to whether you wish to progress to a full sale.

To discuss this service in greater detail, or for further information, please contact the office and ask to speak to Simon Daniels. 

KBS Corporate advise on MBI for K G Coating Limited

KBS Corporate, Bolton based specialist in company sales and brokerage services, has assisted in negotiations for the £1.6m deal for Wrexham based K G Coatings, which completed on February 1^st 2013.

The buyer was Mr Gavin Williams, an MBI Candidate who was formerly Operations Director at Ribble Packaging Ltd.  Gavin was advised by David Plant of Proventure Consulting in Manchester, with whom KBS has built up a good relationship.

K G Coating boasts an impressive client list and carries out work for companies such as Airbus.  

Key to negotiations was Guy Haynes, experienced Senior Deal Executive who comments  “I am delighted that this transaction has finally completed, and the strong relationship between buyer and seller was key to this.  This deal has offered our client a clean exit from the business, so that he can concentrate on other interests, and our client firmly believes that Gavin has the tools to take the business forward and build on its existing success.  I wish both parties well for the future.”

Sector Review: Engineering

Engineer the sale of your business in 2013

KBS Corporate has the tools to help you achieve the maximum value for your engineering company.

The UK engineering sector has a turnover of £1.06 trillion accounting for almost 24% of the UK economy and is seated well within the top 10 nations globally for engineering output.

The key driver for future deal making, is the engineering sector’s key part to play in delivering continued economic growth for the UK, in building our capacity to compete in a rapidly growing global market and in tackling global challenges, including climate change, health, food security, biodiversity, water security, population and energy security.

However, with the UK employing over 5.4 million people in the engineering sector, across 543,440 companies, competition is indeed fierce.  Solid fundamentals, good cash reserves, and weak organic growth prospects create incentives for executives to look to Mergers and Acquisitions for expansion or consolidation.

If you are considering the sale of your company, ensure you engage a company with the experience and expertise to achieve your objectives. KBS Corporate is recognised as one of the UK’s leading providers of company sale and brokerage services. We successfully handle transactions on UK companies with a typical turnover of up to £25 million and our buyer reach extends throughout the globe.

Our industry leading approach has been developed on the back of many years of successfully selling companies.At KBS Corporate we strive to offer the most comprehensive service to owner managers who are starting to consider their exit strategy.

3. Understanding You and Your Company - Our first aim is to fully understand your objectives and what you want to achieve. Only by doing this can we ensure that our bespoke service is specifically tailored to your needs.

2. Presenting Your Company - KBS Corporate produces a detailed and accurate document that presents both the historical performance and future potential of your company, in its best possible light.

3. Buyer Reach - Our objective is to provide the most comprehensive ‘buyer reach’ within the industry. With a combination of focused buyer targeting and proactive marketing, We explore every possible avenue in our search for your optimum buyer

4. Managing The Process - KBS Corporate has the knowledge and experience to ensure that your sale is handled with the care and attention that it deserves. This would include Buyer Meetings, Offers, Negotiation and Project Management.

Engineering businesses are in demand

 KBS Corporate is at present, instigating sales on businesses just like yours. As a result of the significant interest generated in recent business sales, we have retained buyers still looking for opportunities.

Current acquisition activity in the engineering sector:

Engineering: Blackwell Hydraulics Engineering Acquired by Hydroscand Ltd

Blackwell Hydraulics Ltd undertake hydraulic & industrial hose assemblies with a turnoverin excess of £2m. Hydroscand is established in 15 countries with more than 120 branches and a turnover of €190m.

Manufacturing: IVI Metallics Ltd Acquired in Management Buy In

IVI Metallics Ltd manufactures a wide range of precision quality tacks and nails primarily for the footwear industry. The MBI team will inject IVI with the revenue required to take it to the next level of development.

Metal Finishing: KG Coating Acquired in Management Buy In

KG Coating boasts an impressive client list and carries out work for clients such as Airbus.

At completion, the company had a turnover of approximately £1.3m and an EBITDA of £350k.

Hydraulic Engineering: Dale (Mansfield) Ltd Acquired in Management Buy Out

Dale is a £2m turnover market leader in the manufacture and supply of hydraulic cylinder, mechanical and hydraulic equipment. The existing shareholder now controls 100% of the company and will strive to achieve continued growth.

Engineering Consultants: John Pryke & Partners Ltd Acquired by HLN Architects Ltd

John Pryke & Partners Ltd has over 50 years experience in the structural engineering consultancy sector. The business was acquired by HLN Architects Ltd in late 2012.

Precision Engineering and Fabrication: Deal Agreed with Venture Capitalist

Providing a unique product, exclusive long term client relationships, and demonstrating strong year on year growth, this South East company turns over £4.6m with sustainable profits of £800k.

Precision Engineering: Deal Agreed with Venture Capitalist

Serving the Aerospace and Defence Industry, this South based niche precision engineering company has a turnover of £3.6m, and an Adjusted Net Profi t of £650k. Established over 30 years, it offers huge growth potential to a new owner.

Acquisition statistics

In 2012, there were over 250 acquisitions involving UK based engineering companies.

Zephyr

“There was a 28% increase in the global value of merger and acquisition (M&A) activity in construction and engineering during the third quarter according to latest research by PwC.”

The Construction Index

 

Recent Transactions in the Engineering Sector*

• Consulting Engineers Ltd Acquired by BWB Consulting Ltd Feb 2013
• Oil & Gas Engineering Global Energy Group Ltd Feb 2013
• Railway Engineering Company Ltd Acquired by Hitachi Europe Ltd Jan 2013
• Procyon Oil & Gas Ltd Acquired by Mott Macdonald Group Ltd Jan 2013
• Gabriel & Company Ltd Acquired by Newby Foundries Ltd Dec 2012
• SG Magnets Ltd Acquired by SG Magnets Holdings Dec 2012
• Responsive Engineering Group Ltd Acquired by Reed Group Ltd Dec 2012
• Riverside Engineering Services Acquired by Rigmar Services Ltd Dec 2012
• BHW (Components) Ltd Acquired by LNB UK Ltd Nov 2012
• Rymer Engineering's Welding Repair Business Acquired by Lambra Welding Systems Ltd Oct 2012
• Stanworth Engineers Ltd Acquired by Merc Engineering UK Ltd Oct 2012
• Colston Engineering Services Ltd Acquired by Dynamic Air Engineering UK Ltd Sep 2012
• John Huddleston Engineering Ltd Acquired by Magellan Aerospace Corporation Aug 2012
• Summerlin Engineering Ltd Acquired by Incerb Ltd Aug 2012
• John Pryke & Partners Ltd Acquired by HLN Architects Ltd Aug 2012
• NR Automatics (Engineering) Ltd Acquired by MBO Team Jul 2012
• JR Gilbert Engineering Ltd Acquired by MBI Team Jul 2012
• Jet Engineering (Scotland) Ltd Acquired by Ensinger Group Ltd Jul 2012
• Underwater Engineering Services Ltd Acquired by ATR Holdings Ltd Jul 2012

*Data sourced from Zephyr

KBS Corporate has an enviable track record in the engineering sector. To arrange a free, no obligation meeting with a Regional Director to discuss your options, or for an informal chat, please call Simon Daniels on 0844 38 77 352 or email simondaniels@kbscorporate.com

10 Reasons to Choose KBS Corporate

At KBS Corporate we strive to offer the most comprehensive service to owner managers who are starting to consider their exit strategy.

10 reasons to choose KBS Corporate:

1. Over 50 members of qualified staff, ensuring your sale is handled by the right people

2. Well established, trusted and respected company with strong financial credentials

3. Proven track record with hundreds of successful transactions over the last 15 years

4. Awarded the highest accolade and ranked in the top category by an independent report into the leading 200 UK Brokerage and Corporate Advisory firms in 2012

5. Industry leading attractive and accurate sales documentation

6. Ongoing investment into buyer research and marketing facilities to contact the full range of complimentary and competitive trade acquirers, strategic buyers, financial buyers and institutional investors

7. National coverage with Corporate Managers and Directors in key strategic locations

8. Stringent confidentiality procedures and buyer vetting to ensure only suitable acquirers are targeted or provided with sensitive information

9. International network of buyers and advisors

10. Fair and equitable fee structure, tailored to each individual client

Insolvency market "challenging" despite retail woes

Source BBC News

Begbies Traynor, the National Corporate Restructuring Group, says the insolvency market remains "challenging" despite the recent cluster of high profile retail failures.

Executive chairman Ric Traynor says the headline-grabbing administrations of HMV, Jessops, Republic and Comet are masking the true picture of economic landscape. In a third quarter trading update he said "The group has continued to report good, sustainable levels of profitability whilst maintaining a sound financial position. Overall the insolvency market remains challenging, despite the impression given by a number of high profile retail administrations since Christmas."

Citing Insolvency Service figures the firm said 2012 had seen a 5.8% fall in the number of corporate insolvencies in England and Wales to 20,580.

Begbies Taylor said its profits in the three months to the end of January were in line with expectations, while net debt is also in line with the board's targets and "comfortably within" its banking facilities.

A Good Time to Sell Your Business?

“There is no such thing as a good tax”  - Winston Churchill

This may be the case, however, for trading businesses and companies (minimum 5% employee/director shareholding) held for one year or more, under current Tax Legislation and Entrepreneurs Relief, you may only be liable for an effective tax rate of 10% on the first £10 million (maximum lifetime limit) of all qualifying gains made upon the sale of your business, a significant reduction on the 28% CGT rate for higher rate tax payers.

Further Information and details on the qualifying conditions can be found at: www.hmrc.gov.uk/businesses/reliefs

Have you considered selling your business? Contact KBS Corporate on 0844 70 11 880 to discuss your options.