Total consideration payable: up to £8.9m
Project duration: 8 months
The shareholders of Vannplastic Ltd, which trades as Ecodek, founded the business in 2002 and backed it financially thereafter. Under the guidance of co-founder Alex Collins, the business pioneered the development of wood-plastic composites as a new material for the manufacture of building materials and has grown to be one of the largest manufacturers in the UK. By 2015, annual sales were growing at 20% per annum and the business was generating attractive levels of profitability. The shareholders recognised that with the right approach the business could maintain its growth and profitability, but had got to a scale where this would necessarily be a different approach to what had succeeded for them in the past. How could they make the transition without putting at risk the significant value they had created?
Minton Quinag quickly investigated the business in detail, prepared a sophisticated financial model to highlight its financial and commercial drivers and to test its financial robustness under a number of different scenarios. This revealed that the business would support a range of possible options: including a combination of growth and replacement capital from private equity, the sale of a stake to a commercial partner or an outright sale. Following a wide ranging market research exercise, Minton Quinag identified more than forty qualified and highly relevant potential purchasers and investors from different categories. This population was refined to produce a shortlist, who were approached confidentially. Following initial meetings, six offers were received allowing the shareholders to understand at first hand what life might be like depending on which route they elected to follow and what value they would be able to attribute to the business now and in the future.
After a period of negotiation with several shortlisted bidders, Epwin Group emerged as the clear preference of the shareholders. This was based on the evident compatibility of the two organisations’ management style and approach; the strong market presence of Epwin, which would open up greater market access for Ecodek; and the terms of the transaction negotiated.
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