In this article, Commercial Property Specialist Charlie Bennett discusses how Heads of Terms work, whether they’re legally binding and what to look out for when negotiating.
Management buyout at electronics firm – by sons of founders
Frettens' Corporate & Commercial Team recently advised a long-standing client on a management buyout in which the current owners and founders sold the business to their sons.
Electronic Technicians Ltd (ETL) was founded 35 years ago by Ken Crook and Pip Arnold and employs over 50 staff at its large, modern facility on Ferndown Industrial estate.
They have clients across the aerospace, automotive, defence, energy, marine and medical sectors, including BAE Systems, Siemens, Cobham, Lockheed Martin, Europlaces, Molecular Devices and Meggitt.
Succession planning in family business
Managing Director Stuart Crook and Sales Director James Arnold are now at the helm of the multi-million-pound turnover company which boasts national and international customers.
Stuart Crook said:
“It is very much business as usual here as both James and I have been with the company for many years and know it inside out.
“We see this very much as a positive change, a natural progression keeping the business in the family and securing its future for years ahead.
“We are looking for steady growth as we expand and modernise the business moving forward, offering an even more professional approach.”
James Arnold added:
“We are very much focused on customer satisfaction. We intend to continue to invest heavily in equipment, business tools, services and people, particularly with regard to apprenticeships.
“We offer a uniquely flexible approach to manufacture, based entirely on quality products and service, and we treat all customers, large or small, in exactly the same way throughout the process.”
Ken and Pip will be still involved with the business as advisors, their experience ready to be called upon when required.
MBO Solicitors in Dorset
Matt Fretten, on advising on the deal, said:
“Our corporate team advised on the buyout in terms of achieving a successful succession and facilitating the retirement of Ken and Pip from the business.
“We were dealing with the reorganisation of the company and the ongoing relationship between Stuart and James, who are responsible for the company’s next chapter. How a business evolves through the generations is vital to its well-being.
“We have worked with ETL for some time and were delighted to have assisted them on what is a very important stage in the company’s history – helping them tackle the sometimes thorny issue of succession head-on and very successfully.”
Management Buyout advice in Ferndown, Christchurch and Ringwood
South West accountancy firm PKF Francis Clarke, who also have a longstanding relationship with ETL, advised on how to structure the takeover deal.
James Robinson, Managing Partner:
“We facilitated the changes as a smooth process over a period of time, rather than loading too much financial burden on the company and its directors through a straightforward buyout.
“We have also advised on future business strategy, tax efficiency on the constant investment in new equipment, income protection and protection for directors and their families.
“Ours is very much a strong business-to-business relationship rather than one of just traditional accountancy. We have vast experience in the field of family businesses and I hope this is very much helping ETL.”
Further information on MBOs
The following links to articles covering the MBOs and press coverage of this deal may also be of interest.
What is the Management Buyout Process and how does it work?
The Importance of having a properly drafted partnership agreement
MBO keeps electronics manufacturer in the family Insider Media Ltd
Manufacturer is sold to the sons of its two founders Bournemouth Daily Echo
Long-established electronics manufacturer Electronic Technicians Ltd (ETL) has been acquired in a management buyout with a difference. Dorset Chamber of Commerce and Industry
Sons buy company from founding fathers in management buyout with a difference Business in Dorset
Frettens: Management Buyout Solicitors in Bournemouth, Poole, Christchurch, Ringwood
Real People. Well-rounded advice. Brighter outlooks.
For a free initial consultation at our Christchurch or Ringwood offices with a member of our Corporate and Commercial Team, call us on 01202 499255 or fill in the form on this page.
