MBO of SG Magnets

Transcend Corporate has advised Newco, SG Magnets Holdings, and its Management Team on the Management Buy-Out of the SG Magnets group of companies (“SG Magnets”).

Rainham based SG Magnets designs, manufactures, and supplies highly specialised magnetic components to the global automotive industry, including customers such as Bosch, TRW, Ford, Volkswagen, and Caterpillar, where they are used in components such as fuel injectors, anti-lock braking systems and gear boxes.

The Management Buy-Out, which was arranged by Transcend Corporate, was funded through a combination of equity provided by management, vendor deferred consideration, and bank debt from PNC Business Credit. Management has acquired 100% of Newco.

The principal issue of the transaction revolved around the acquisition of a company with a legacy pension funding deficit, which required approval not only from the Pension Trustees but also a formal clearance by the Pensions Regulator.

Ian Curtis, who jointly led the deal with fellow Transcend Corporate Director, Ian Aldridge, said “SG Magnets is yet another example of how Transcend Corporate can help all stakeholders achieve their objectives, which on this deal included the existing shareholders, the Pensions Trustees, and Management, whilst safeguarding the continued growth of the business.”

Ian Aldridge commented, “SG Magnets is a very exciting, niche technical manufacturing company with circa 150 employees operating in a global market which, in spite of economic uncertainty, continues to flourish. It was particularly satisfying to help the company’s transition to a new Management Team, thereby ensuring a long tradition for excellence.”

The Management Team is led by John Taylor as Managing Director, with Stuart Hutcheon as Sales Director, who have been joined by Jon Swift as Technical Director, and Stephen Williams as Finance Director.

John Taylor said, “This was a highly complex deal and without the professional ism, experience, and commitment of Transcend Corporate I doubt whether this transaction would have happened. Transcend did a first class job and we are delighted that we chose them as our advisers.”
Ansons LLP in Cannock, led by Hilary D’Cruz, acted as legal advisers to Newco and the Management Team. Peter Whatson of PNC Business Credit in Birmingham provided the debt funding.