The family-owned business based in Rugeley, is run by founder and Managing Director, Karl Willis. Established in 1989, they’ve built a solid reputation for quality and reliable packaging and boxes, specialising in the meat, fish and horticultural sectors.
Having worked with Karl and the team at Lyburn for many years, we could see that although they had ambitions to grow the business, they also had capacity issues so together we needed to think outside the box.
That’s where Tom Bostock, Client Services Director, could offer a helping hand…
Weighing up the options, organic vs acquisition
After many successful years of organic growth, Lyburn were achieving incredible things as a business but the forecasts showed that they had reached maximum capacity at their existing site. After sitting down with the Lyburn Management team to understand their goals, it was evident they were looking to take the business to the next level. Tom and his team identified two options – open an additional site to allow for further organic growth or acquire another business.
After plenty of discussion, option one was ruled out – it came with too much risk and would require a lot of work from the sales team to recruit new customers and access new markets. The benefits of acquisition far outweighed the those of opening another site, so, acquisition it was!
The road to acquisition
As Tom said in his article, ‘Growth by acquisition – the advantages’, the fastest way to grow your business will always be through acquisition, but when starting out on the journey, there’s lots to prepare to make sure the purchase is right. This is where we took the pain away for the Lyburn team, supporting them at every step along the way.
After identifying the target acquisition, we ran valuation and forecast models to see if the newly combined business was a winner. This allowed us to advise on a fair price for the target business and negotiate terms with the vendor, structuring the deal in a way that was affordable and attractive for everyone involved – both Lyburn and the vendors along with potential funders, securing exclusivity along the way.
In this case the numbers were good, so when we approached funders, we were prepared to negotiate the very best possible deal. Having received offers from a number of funders, we were in an incredibly strong position and had options. In this case, Lyburn chose to partner with HSBC who tailored the funding to their needs. We managed the process throughout, providing HSBC with all the information to get credit approval and negotiating the most favourable rates, through to checking the conditions, covenants and terms were best for the client.
To make sure that there were no hidden surprises waiting to jump out of the box, we also managed the financial due diligence; to make sure the package was exactly what it seemed. A vital part of the process, it also helped Karl identify any commercial opportunities and synergies, building a business case attractive to the funders.
The next step was the legal process, and although we’re not lawyers, it was our job to project manage the purchase; making sure the deal moved at pace, working with the legal team to keep the deal on track and reassuring Karl along the way whilst making sure the business was protected as much as possible.
Having been through the acquisition process ourselves many times before, as we approached completion, we worked with the Lyburn team to advise on integration and any potential challenges.
The rest, as they say, is history…
The end result is really quite special, Karl and Lyburn now own an additional site, and have access to an experienced team, new customers and new markets.
Not only this, the acquired business also had manufacturing in-house which is something that Lyburn didn’t have the capability of previously. Together, they’ve now cut down the supply chain, making the business more profitable all round. The new partnership is definitely the perfect package!
“Tom and the team at DJH Mitten Clarke made the process of acquiring another business surprisingly easy and their support throughout the whole process reassured me that my business was in safe hands.
They helped us weigh up our options, took the time to understand our goals and then advise on how best to grow our business. All the necessary checks were carried out including forecasts, valuations and due diligence, giving me peace of mind that the acquisition was the right fit for the business.
Tom and his team went above and beyond, were extremely professional but personable too and made it a pleasure to work with DJH Mitten Clarke.”
