The management buy-out of Parweld, a leading global brand in the manufacture and wholesale of arc and gas welding torches, welding machines, consumables and personal protection equipment. Parweld, which has turnover of £16 m, offers high quality products and service to a customer base comprising a network of wholesalers and distributors in the UK and Europe as well as Africa, Asia Pacific and North America. It operates from its headquarters and distribution facility in Bewdley, Worcestershire, supported by its manufacturing base in Jiangsu, China. It is best known for its range of Mig and Tig torches which include patented gas-flow technology. To facilitate the transaction the management team, led by Managing Director Graham Perry, has rolled-over its shareholding with the support of a debt package from HSBC UK, allowing it to acquire the business from majority shareholder Chris Parker who has also reinvested in the new vehicle, taking the position of Chairman during a hand-over period.
We were mandated to source a debt package that would provide sufficient quantum to facilitate an MBO and then to structure a transaction that would meet the objectives of both the vendor and the management team, working with our client and their legal advisers to deliver the deal. This involved bringing Parweld’s Chinese operation into the group structure as well as demerging a non-trading business and dealing with minority shareholdings. We ran a competitive debt process which generated significant interest and resulted in us negotiating a full asset based lending facility plus term loan with HSBC to support the deal and provide on-going working capital facilities, thus allowing us to optimise the position for our client as the basis for the transaction structure.
WHAT OUR CLIENT SAID:
“The Cattaneo team demonstrated their considerable knowledge of the debt market, soliciting competing offers of finance with alternative structures, negotiating these offers and devising a transaction structure which met the objectives of all parties. They then worked diligently through the detail with our other advisers to overcome the inevitable challenges and conclude the transaction. We valued their clear advice and tenacity in delivering the deal.”
Chris Parker, Chairman, Parweld