Benson Group completes MBO

UK folding carton manufacturer Benson Group has completed a management buy-out (MBO), which will help the business achieve its growth ambitions.
 
Led by managing director Mark Kerridge and commercial director Nick Benson, the MBO was facilitated by investment from Lloyd’s Development Capital (LDC), the private equity arm of Lloyd’s Banking Group. The transaction was completed by the LDC Midlands team this month (December) using capital from LDC’s £200 million manufacturing and specialist engineering commitment.
 
Benson Group employs more than 900 staff and operates from its head office in Bardon in Leicestershire, as well as manufacturing sites in Newcastle, Gateshead and Crewe. Originally established in the 1920s by the Benson family, Benson Group has been led by Kerridge since 2002 and has grown considerably in recent years following a mix of strategic acquisitions, organic growth and substantial investment into all of its manufacturing facilities.

This includes growing from a £10 million turnover single-site operation to a four-site £108 million turnover organization returning an EBITDA of £10.7 million in 2011, acquiring three additional packaging businesses, absorbing the order books of two further companies and investing over £22 million in plant and equipment. The business is currently on track to reach sales of £120 million in 2012.

The MBO allows the exit of the two principal Benson family shareholders from the business and will help to support the management team’s growth strategy. LDC Midlands investment director Andy Grove was the driving force from the private equity investor, supported by Matthew Norrington, another investment director at LDC. Grove and Martin Draper, LDC’s UK new business managing director, will join the Benson Group board with immediate effect.
 
Commenting on LDC’s investment, Kerridge (pictured, above) said: ‘LDC’s investment and support for Benson Group will help the company realize our growth ambitions. It will further strengthen our market leading position, provide a foundation for future growth and ensure that we maintain a high quality service for our customers.’

Kerridge added: 'We expect to continue with our current business strategy, with further organic growth anticipated. The business plan that has been created for the MBO has identified a number of potential opportunities for us to explore in the near future. We will also be keeping a keen eye on European developments.'

Grove said: ‘In Benson Group, we are partnering with a high quality management team and a market leading business which has a strong platform from which to generate further growth. Going forward, we will work closely with the business to identify acquisition opportunities in order to help accelerate growth.
 
'This deal represents the eighth transaction completed by LDC’s Midlands team in 2011 and confirms our long-term commitment to supporting regionally based mid-market businesses with ambitious growth plans.’
 
Draper added: ‘The Benson Group is a growing business in a sector that we understand well, with a first class and ambitious management team, and the transaction has been completed by the Midlands team of LDC’s regional network. It is the 15th investment of 2011 for LDC and once again demonstrates our commitment to UK SMEs.’
 
Lloyds Bank Corporate Markets’ Acquisition Finance team, including Paul Whitehouse, Andy Taylor and Martin Cordey, and HSBC Leveraged Finance Midlands team, namely Stuart Grantham and Andy Payne, also jointly provided a package of senior debt and revolving credit facilities to support the transaction.
 
Whitehouse said: ‘Benson Group has a highly experienced management team, strong growth track record and best-in-class manufacturing facilities, which position the business to continue its expansion with the backing of LDC.’
 
Grantham said: ‘The company represents an attractive funding proposition and we are delighted to support it through the next stage of its strategic development.’

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