Senior employees at a Nottingham-based electrical control and automation company have undertaken a management buy-out using multi-million pound funding from Bank of Scotland Corporate. The finance has enabled the four-man team at Blackburn Starling, which includes managing director Steve Hooton, financial director Colin Sparham, operations director David Gould and technical director David Whelan, to buy out the company’s existing shareholders.
Blackburn Starling provides a broad range of electrical control and automation services, but its core business is the design, manufacture and installation of electrical motor control systems, generator control, and high specification distribution switchgear.
The company recently completed a project to install switchgear for the new tram network in Nottingham, and has also helped develop a pioneering system which pumps water and fuel off the runway at Dubai Airport during extreme weather conditions.
The company currently employs 210 people and has a turnover of over £12m. Its client list includes the major Water Utilities, Shell, British Petroleum, BT, AT&T, Rolls-Royce, Kraft foods and McVities.
Steve Hooton, managing director, said: “We have used the funding to buy out the existing shareholders, and we now hold 100% of the shares. We are now in a position whereby our experienced management team can try to develop the business further.”
Andy Fuge, director of New Business at Bank of Scotland in Nottingham, added: “We worked very hard to create a deal that was acceptable to the entire management team. In doing so we gained a good understanding of the business and had a great working relationship with all involved.”
David Browne of Cooper Parry Corporate Finance advised the management team during the buy-out. Browne said the fact that the management team had already been running the business on an autonomous basis for a number of years meant that this really was a ‘vanilla’ MBO. “The fact that the management team finally managed to take ownership of a business which they had been instrumental in growing was particularly satisfying,” he said. “This transaction reflects a natural progression in Blackburn Starling’s ownership and presents an ideal solution for the exiting shareholders.”
Browne said as a part of a structured succession plan being in place, the management team had already been running this established business for a number of years. “It is fantastic news to see them finally take ownership and I am particularly delighted for Steve Hooton who, since joining Blackburn Starling 30 years ago, has worked his way up through the organisation. Despite the fact that it took considerable time to agree the principles of the deal, once this had been done, the goodwill of the local advisers ensured the transaction was completed extremely quickly.”
Completing the team of local advisers on the project was John Heaphy of Freeth Cartwright’s corporate finance department. As legal adviser to the management team, he said that time had been of the essence in bringing the deal together in what was a very short period of time. “We completed the deal exceptionally quickly and this was in no small way aided by the fact that all the advisers were locally based and worked extremely well together to deliver the deal within what was a challenging timescale laid down by our client,” he said.
Sarbjit Bitter led a team from Tenon that was instructed by Bank of Scotland to undertake financial due diligence. “This is a strong, experienced management team, with a good quality business offering,” Bitter said.