K-TIG, is an innovative technology and welding company listed on the Australian Stock Exchange. Its technology is complementary to GEL’s range of advanced manufacturing capabilities. Again, no figure has been put on the deal. A share purchase agreement was signed towards the end of March, with completion expected in the near future subject to Australian Securities Exchange (ASX) and other regulatory approvals.
Adrian Smith, K-TIG chief executive, says: “We are delighted to have secured the acquisition of GEL and look forward to providing our technology in addition to the advanced manufacturing techniques already offered by GEL to the nuclear industry and other demanding sectors.”
The industrial products team at corporate finance experts Transcend Corporate, led by Chris Bill, advised the GEL shareholders on the sale.
Chris says: “The business is a strategic asset in the nuclear industry and interest in acquiring it was extremely high. In managing the sale process, we were able to identify K-TIG as an ideal future home for GEL.
“As someone who has been personally involved in the global nuclear industry, it is very pleasing for me to help an important business such as GEL find a new strategic home and to accelerate K-TIG’s increasing support of the UK nuclear sector.”
The new owners of Preston-based BREC (Holdings) aren’t quite so far away. One of the UK’s leading providers of conveyor belt services, it has been acquired by Richemon Group International based in the French city of Bordeaux. BREC, which has 40 employees, also has a North East site in Jarrow. The company provides conveyor
belts, on-site vulcanising and related services to major businesses across the UK and internationally. Its clients include Aggregate Industries, Hanson Cement, Tarmac, Tata Chemicals and Pilkington Glass. Another March deal, again for an undisclosed sum, facilitates the exit of BREC’s founding shareholder and director Geoff Toft who started the company in 1975.
BREC’s existing management team, led by managing director Steve Peruzza, will continue to oversee operations.
Geoff says: “While the ownership of the company has changed, our many customers can rest assured they will get the same quality products and service they have come to expect from BREC and our excellent management team will continue to drive the business forward.”
Adrian Young, tax partner at North West accountancy firm Hurst, says it has witnessed the surge of interest by overseas companies looking at setting up operations in the region.
He says: “Some common themes are emerging. Chief among them is finding an effective way to do business in the UK. This has partly been driven by the need to overcome Brexit-related barriers, but I think it is also symptomatic of a wider uptick in both inward investment and imports.”
Lancashire is looking to attract more foreign direct investment as part of its ten-year internationalisation strategy. Foreign owned businesses in the county currently make up about one per cent of its companies but they contribute 17 per cent in terms of GVA.
The strategy is focusing on digital, aerospace, advanced manufacturing, low carbon technologies and food and drink.
INTERNATIONAL ANGLES Expert View
PLAYING ALL THE By David Filmer, partner Forbes Solicitors
Over recent years there has been a rise in companies looking to buy or sell a business with an international angle, seeking a foothold overseas or looking for an exit point for their imports and exports.
When buying or selling a company with an international element, such as an overseas buyer/seller, or overseas subsidiaries, it is vital that particular issues are taken into account.
The key point is to determine the applicable law which will govern the contract and the jurisdiction which will hear any disputes.
This choice of law is important in cross- border transactions as this will be the legal framework within which the contract, and any disputes arising from it, will operate.
The parties are generally free to decide between themselves the applicable governing law, and this decision can
affect the risk of liability and enforcement for any alleged breach of either of the parties’ obligations.
Where a transaction has an international element, it is essential that local advice is taken in all relevant jurisdictions. Most jurisdictions take differing approaches to the law and business transactions, so a lawyer in one jurisdiction will usually not be able to comment on matters in another.
This can apply even within the UK, where England and Wales have separate legal frameworks from Scotland and Northern Ireland.
A final point to consider is potential language barriers that may arise. While the international business community, certainly in western Europe, sees English as a ‘lingua franca’, there may be situations where communication difficulties arise, and therefore the potential need for translators.
LANCASHIREBUSINES SV
IEW.CO.UK
Steven Bell Corporate Finance Director
/PierceCA @pcaltd /piercecaltd
LOW RISK VIMBO OFFERS VALUE AND FLEXIBILITY
In these increasingly uncertain times, many business owners are looking at ways in which to secure value for their shareholding having invested time and resource into building a robust business.
Many vendors remain cautious when considering a sale to a competitor. The opportunity to undertake a Vendor Initiated Management Buy Out (VIMBO) can provide low risk opportunity for the shareholders to realise the value of their investment.
We recently completed a VIMBO which saw the management team acquire a business they had worked in for more than 10 years. The vendor had indicated that they wished to remain working in the business and the VIMBO opportunity allowed them to secure a significant value for their investment at preferential tax rates. Through a supportive funder the company was able to raise a reasonable level of finance to provide an immediate cash lump sum to the vendors alongside secured loans and a retained shareholding.
Through the retained equity stake the vendors and management team were aligned in the continued success of the business, the loan notes provide flexibility in the funding structure to deliver the required valuation, reduce the third party debt requirement and provide a continued annual cash income over an extended period.
An MBO doesn’t always suit all situations, however where there is a strong management team and where the vendor is willing to remain with the business over a reasonable duration, a VIMBO can provide a low risk, controlled way to realise the value of their business.
Through our knowledge of the funding markets the corporate finance team at Pierce can provide clear advice on whether a VIMBO can be delivered and can support you through the transaction.
Call us on 01254 688100 or visit
pierce.co.uk
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DEALMAKERS
DEALMAKERS
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