Background

Prowrap Limited (Prowrap) is the holding company for two distinct businesses, Wrapex Limited (Wrapex) and Procare UK Limited (Procare). At its core, the group – which operates from a single site in Bristol – is a specialist rewinder and manufacturer of aluminium foil, cling film and baking paper. Wrapex is the UK’s largest independently owned rewinder, supplying aluminium foil, cling film and baking paper to the food service and retail markets. It also manufactures its proprietary Speedwrap dispensing system. Procare is the UK’s leading manufacturer of hair foils, dispenser systems and alternative colour placement systems, supplying the hair and beauty sector.

The group has more than 50 staff, with a revenue of £22 million, and exports to 25 countries; it has already successfully gained a foothold in the European market, providing a platform for future growth in this region. The sole shareholder in the business was looking to dispose of his majority shares to realise value and fund business growth, while maintaining a minority shareholding and continuing as Managing Director after the deal. He appointed FRP to advise on the sale of the business.

Action

FRP’s Corporate Finance team managed the entire sale process – from preparing the information memorandum and identifying potential investors, to negotiating the final deal with the buyer, a private equity investment company. The team had been involved in business sales in this region before, and knew the sector and the potential investors, so were confident that the deal structure could work well for both parties. This was particularly important as it was not a straightforward private equity deal.

Outcome

Our Corporate Finance team identified Longacre Group, a mid-market investor of flexible evergreen capital and were able to negotiate a value for the business well in excess of the shareholder’s expectations. Through detailed analysis and understanding of the company’s working capital profile and negotiation with Longacre the team was able to structure the transaction so that the shareholder could retain a minority interest in the business going forward and also benefit from an additional significant payment from the buyer in respect of surplus cash in the business at completion.

The successful sale enabled the Managing Director to dispose of his majority share in the business, while keeping a minority share going forward and remaining in post for the medium term. Two members of the existing management team also invested in the group, alongside the private equity investor.

The deal not only realised value for the shareholder, but also supported the business’ future growth – a key driver in the decision to sell. The group now has the financial backing it needs to continue to invest, and the management team can embark on the next phase of their growth strategy.

“I’ve worked with Mark and the team at FRP in Bristol for a number of years and would not have been able to complete this deal without their support. The team worked hard to find us the right investment partner and with the support of Longacre Group we will be able to grow the Prowrap Group and develop both brands from our base here in Bristol.” Nick Scoon, CEO of Prowrap