THE DEAL:
The buy-out of a retiring director’s significant shareholding in Sil-Mid, a specialist distributor of silicones, adhesives, lubricants and other products to the aerospace industry from its distribution base in Coleshill near Birmingham. Sil-Mid had four shareholder-directors, one of whom wished to retire and exit from the business. The company therefore needed to agree a valuation for his shares and to structure the necessary finance to fund their buy-back. Over the last thirty years Sil-Mid has grown its portfolio to over 6,000 active products generating turnover of more than £13 million and profit of £1.3 million. On-line sales account for more than half of transactions and Sil-Mid is focused on investing further to accelerate this growth, particularly to overseas customers, while at the same time building its sales team to spearhead the development of its product categories.
OUR ROLE:
Cattaneo was retained to advise on options for buying out the retiring shareholder. We provided valuation advice and then advised on negotiating and structuring a deal with the exiting shareholder. We also undertook financial modelling to assess the impact of the transaction on the future cash flows of the business, including the level of headroom, and worked with Barclays, the incumbent funder, to deliver a finance package to fund the transaction and provide headroom to support the company’s sales strategy.
WHAT OUR CLIENT SAID:
‘We were grateful for the Cattaneo team’s advice, counsel and, above all, patience through the process. We had been talking to Cattaneo about business strategy and enhancing shareholder value when the opportunity arose to buy-out one of our directors and they were instrumental in helping us achieve a good result.’
Andy Nickson, Director, Sil-Mid
