Case Study: Dream Doors Ltd
- Management Buy-Out
- Deal completed:
- July 2017
Meridian advised the shareholders of Gosport based franchise Dream Doors Limited ("Dream Doors") on a Management Buy-Out (“MBO”).
As part of the MBO, Meridian introduced a new managing director as well as taking an equity stake in the business to help with the continued success and assist the business in developing and achieving future goals.
In 2016, the founder and major shareholders of Dream Doors were seeking to put in place the foundations for succession and to find a solution that recognised the value of the company, by then in its sixteenth year.
Following a thorough discussion of shareholder objectives, Meridian saw the need to create a corporate structure that incentivised key personnel (both existing and future management), while meeting the medium-term requirements of the existing shareholders. Meridian drew on its relationships with local lawyers, tax advisers, bankers and due diligence providers to structure and successfully put in place a highly bespoke debt-funded MBO transaction. The transaction met all of the above conditions, to provide a starting point where the various stakeholders were all fully satisfied and fully engaged in the continued improvement and growth of the business.
Meridian invested alongside the Management Team and is now working with the Board to assist with ongoing work including developing the right management team; assisting with KPIs and governance; managing covenants / reporting to the bank under the MBO debt; introducing potential commercial partners from our base of previous clients and a range of other activities to drive growth.
Within two months of completion, Meridian had sourced a high calibre MD candidate with experience of the sector to lead the existing management team. Ahead of the originally-envisaged timetable, the candidate was formally appointed as MD and announced to the franchisee network at the beginning of 2018. He and the pre-existing team are together making significant headway on a number of exciting upside opportunities, with the full support of the shareholders and founder.
Funding was provided by Barclays, Southampton; legal advice was provided by Trethowans LLP, Southampton; financial due diligence was executed by RSM UK Group LLP, Southampton; tax advice was provided by DSA Tax, Marlborough.