The catering equipment distributor market is dominated by a high proportion of private companies typically owned by one or two directors. But what happens to the business when the time comes to think about retirement?
Private acquisition firm, SG Berkshire, claims it has launched a new solution enabling retiring business owners to exit their companies at the right value while protecting their lifetime’s work.
Management Involved Buyout (MIBO) and Management Employee Involved Buyout (MEIBO) involves SG Berkshire purchasing a majority share of the company with the incumbent management team (and employees in the case of MEIBO) also taking a slice of the equity allowing the business owner to leave straightaway, while at the same time maintaining business momentum, preserving job security and ensuring the company legacy continues.
The London-based firm cites figures from the Department for Trade and Industry’s Small Business Service that show up to 100,000 businesses close each year due to ‘transfer failure’ whereby a business owner cannot find a suitable buyer.
This results in many vendors having to delay retirement, wind down the business or undertake a less acceptable trade sale.
SG Berkshire says it offers a real alternative to traditional management buyouts (MBOs) which are 90% down since the financial crisis and are becoming more difficult as banks have cut back on lending.
Ged Tilley, CEO of SG Berkshire, said: “With the post-war baby boom generation now of retirement age many business owners are now looking for a low risk, cost effective means of exit. Our real strength is our commercial and financial capabilities which mean we are able to deliver a high quality, flexible package which offers an immediate deal for the retiring vendor while rewarding the loyalty and hard work of their management team and protecting the legacy of their business.”
The London-based firm uses its knowledge to create low risk capital structures to successfully acquire its businesses.