Case studies
Flexibility key to managment's steely deal
A Yorkshire-based manufacturing firm recovering from an industry downturn is looking forward to a bright future after being bought by its management for an undisclosed sum.
The management has been backed by the Leeds office of Lloyds TSB Commercial Finance, which was the sole funder on the deal.
Founded in 1982, Flexiform manufactures and distributes high quality office furniture and metal products from its 118,000 sq ft headquarters in Bradford.The business, which employs over 90 people, has suffered over the last three years from the £300 million dip in sales across the office furniture market. During this period Flexiform's management implemented a turnaround strategy that has seen it diversify its product range and generate sales of £7.5 million. The additional revenue streams have ensured the business has come through the downturn and is expected to generate an additional £1m of sales over the next 12 months.
The management team, including managing director Nick Hewitt, finance director James Downs and sales and marketing director, Nick Saunders, has bought the majority shareholding from parent company Bullough. Flexiform was advised throughout the deal by Mark Eardley of WBS Corporate Finance and Andrew Bradley of solicitors Shulmans. The Leeds office of Lloyds TSB Corporate will provide Flexiform's day-to-day banking requirements.
The business was able to survive the downturn by developing innovative manufacturing processes and producing new lines of sheet metal products. Flexiform now boasts two new divisions, Asgard - producing secure external metal storage products - and a subcontracting division capable of producing bespoke metal products for a variety of uses. The firm has also recently opened a new showroom in London and has secured significant supply contracts with both existing and new customers.
Ken Hewitt previously owned the business until it was sold in 1998 to Bullough. In this time his son Nick has progressed through the business to lead the management team who are buying the business back. Nick Hewitt, now managing director of Flexiform, said: "The industry has seen a rough period in terms of sales with many businesses closing under the pressure.
"We were quick to adopt a strategy of unlocking the potential of our state of the art machinery to diversify into new growth markets whilst developing new furniture ranges.
"Lending against our plant and machinery was key to us financing this deal and it was Lloyds TSB Commercial Finance's ability to provide a full range of asset based lending facilities that was integral to this complex deal completing. "
Peter Scaife, senior regional manager at Lloyds TSB Commercial Finance in Yorkshire, said: "Flexiform's response to the market dipping was to invest in new manufacturing processes that would ultimately secure their long term future.
"Their success is testament to the management team's determination to diversify the business and develop the products needed to drive sales in difficult times.
"We will continue to support the business as it looks to capitalise on the returning market and continues expanding. "
Mark Eardley commented: "WBS Corporate Finance is delighted to have been able to advise the management on a deal which has helped bring Flexiform back into the family fold. "
"Having previously audited the business when it was under the Father's ownership, WBS will be auditing Flexiform moving forward. "
Lloyds TSB Commercial Finance is part of the Lloyds TSB Group plc.
