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Local firms advise on MBO at SRM


Posted on 22 August 2014

SRM Industries Limited, a leading manufacturer of precision rubber mouldings based in Hatton, Derbyshire, has completed a Management Buy Out, advised by the corporate finance division of Midlands business advisers and accountants, Smith Cooper.

The company, which was established over 30 years ago, has developed a varied portfolio of rubber components, both manufacturing and supplying gaskets,  rubber mouldings, rubber to metal bondings, elastomer mouldings and associated rubber products.

The deal saw founders Mike and Yvonne Spare handing over the day to day control of the business to the management team who will steer its future growth and development.

The management team, comprising of James Rodgers (Managing Director), Paul Barton (Sales and Marketing Director) and Martin Spare (Finance Director), acquired majority ownership of the company, although Mike and Yvonne retain a significant financial stake and will continue to provide consultancy services.

John Farnsworth and David Crump of Smith Cooper Corporate Finance assessed the viability of several deal structures and the availability of funding, and then managed the proposed deal preparing of Heads of Agreement, advising on the production of the business plan, leading negotiations with the funder, and working with the buyers and sellers and their respective legal advisers through to completion. Other divisions of Smith Cooper advised on tax aspects of the transaction and on the financial modelling of the client’s forecasts.

Commenting on the deal, John Farnsworth Corporate Finance Partner at Smith Cooper said “Over the past 30 years, the SRM team has built an excellent reputation within their industry. The acquisition will be the start of another exciting chapter in the life of SRM and with a recovering world economy, particularly in the UK, I believe that the management team can look forward to a sustained period of growth and success.”

Legal advice to the sellers was provided by Murray Macnab and Jennifer Geary of Ellis-Fermor & Negus, whilst Duncan Taylor and Alice Rees of Nelsons Solicitors advised the management team. The funder, HSBC, whose team was led by Alison Burton and Darren Joyce, were advised by Anna Mayfield of legal firm Gateley LLP.


Reflecting on the deal, Mike commented “Having established and developed SRM for over 30 years, Yvonne and I realised that it was time to hand over ownership and responsibility.  In undertaking the management buyout, we recognised the importance of preparing for the transition period and managing the expectations of our staff members and loyal customer base.  The deal marks the beginning of a very exciting era for SRM and we have great confidence in James, Paul and Martin.”

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