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Seed developments sows plan for growth
The new management of Seed Developments, a company that produces materials to facilitate the successful growth of flower and vegetable seeds, is targeting international and domestic expansion.
The four strong investment team, lead by managing director Andrew Gould, has acquired the entire share capital of the business following the £2.5 million MBI, with finance provided by HSBC. Mark Perrins, International Commercial Manager at HSBC's North Devon and South Somerset Commercial Centre, led the deal on behalf of the bank, whilst the acquirers were advised by law firm Foot Anstey and accountants Albert Goodman.
This is the second significant MBO/MBI deal HSBC's North Devon and South Somerset Commercial Centre has supported since the start of the year. It provided structured debt and ongoing banking services to facilitate the £8.5 million MBO of Aero Stanrew in January.
Seed Development is based near Bridgwater, Somerset, and employs approximately 50 people. The company produces materials to facilitate the growth of domestic flower and plant seeds, including tape, mats and disks. The products optimally place the seeds for efficient growth without the need for handling seeds, remove the need for thinning out seedlings and resulting in better yields and stronger plants.
It makes seed tapes and associated products for seed companies throughout Europe, North America and Australasia and enjoys a 70% share of the global market, generating 98% of its £2.3 million turnover from exports. It was formed in 1966 and the previous joint owners, Pieterpikzonen BV, a leading Dutch seed company, and Richard and Bella Flood, ran the business since 1996.
Andrew Gould was previously finance director of the Jockey Club for 22 years and is currently chief executive of Verand Consulting. He believes the business offers strong growth opportunities both at home and abroad. He says: "We all like to be more careful about what we eat these days and there is certainly a trend towards growing your own food in the UK. Many gardeners are using pot luck when planting seeds and could be deterred from trying again if their plants fail. We believe the UK is a real untapped market for this product, but there are also strong growth opportunities in our current international markets and, potentially, beyond."
He added: "I'm pleased that HSBC has the vision to back this deal. We are a highly experienced management team and have a clear strategy of where we want to take this company. This MBI shows that deals can be done if the right people and businesses are involved."
Gary Burton, HSBC Regional Commercial Director for the South West and Wales, added: "The management team behind this MBI have significant business experience and delivered a clear and coherent vision of where they want to take the company, which has already enjoyed strong success and operates in a growth market. These factors present a compelling case for investment and we were pleased to back the management team in this MBI.
"This is the second MBO/MBI type deal we have supported in the South West since the turn of year following the Aero Stanrew deal in January and although this type of deal is not as commonplace as it once was, we are seeing an increase in activity in this area."
Duncan Sykes, Corporate Partner at law firm Foot Anstey, said: "We are delighted to have worked with Andrew Gould and the team on this deal. They clearly have strong plans to expand the business which is great news for the region. We look forward to supporting the team with specialist advice in the future."
Albert Goodman Corporate Finance Partner Tracey Williams added: "It was good to work with a bank who from the outset looked beyond the 'MBI' headline and the conditions of the debt markets. This is a gem of a business. Even in this climate, the usual prerequisites apply and made this deal possible: impressive management team, visibility of revenues and an attractive and growing market sector."
Albert Goodman has offices across the region including Taunton, Chard, Yeovil, Bridgwater, Weston-super-