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Leading Quarry & Laboratory Businesses Sold in Multimillion Pound Deal
Prism Corporate Broking facilitated a complex deal which sees Needham Chalks and Alliance Technical Laboratories Ltd (ATLL) acquired by Bishop’s Stortford based Harlow Agricultural Merchants.
Established in 1947 by the late Maurice Smither, Needham Chalks specialises in quarrying, processing and merchanting chalks, primarily for agricultural liming. Today it is the largest producer of quarried agricultural chalks in the region and at sale had reserves of around 2.5 million tonnes. It has also established itself as the country’s largest supplier of knapped flints for the building trade, primarily sourced from its two Norfolk quarries.
ATLL is the leading independent contract analytical laboratory in East Anglia. The laboratory comprises two individually accredited divisions - Chemistry and Microbiology - running a wide range of testing with particular specialisms in food, water & effluent, soil & compost, environmental and industrial markets.
In April 2011 David Smither, who was the major shareholder and Managing Director of the group, tragically died in an accident. Paul McCartney, who at the time of David’s death was part-time Finance Director, was appointed Group Chief Executive. Despite the adversity brought about by David’s loss, the businesses have continued to go from strength to strength. David’s passing marked the end of a 64 year period of hands-on management by the Smither family. With no remaining family members working in the business, the shareholders decided to seek new owners for their businesses and instructed Paul to explore options.
In July 2011 Paul was introduced to Robert Fiske and Peter Watson, directors at Prism Corporate Broking, specialists in advising clients on buying and selling businesses. Prior to marketing the business, Prism undertook a considerable amount of work in order to fully familiarise themselves with both businesses, prepare sale documentation and research potential acquirers. The team at Prism started marketing the businesses in April 2012.
“At the outset we were running two discrete sales processes, fully anticipating the two businesses would go to separate buyers, being that they are quite distinct operations”, commented Robert Fiske from Prism. “Indeed, the majority of interest – and offers - for both businesses did come from related sectors”, he continued. “Whilst we had identified obvious synergies between HAM and the chalks business, their interest in the laboratory as well proved especially compelling to our clients”.
Founded in 1980, the acquirer HAM is known as one of the leading and most respected independent arable merchants in the country, providing farmers with high quality advice and service in the four key areas of agrochemicals, fertilisers, grain and seeds. In their last financial year they reported a turnover of over £68m. By making these acquisitions, HAM adds additional lines to their service offering as well as a highly capable farm sales team, not to mention a considerable number of loyal customers.
Both acquired businesses will continue to operate as usual with no redundancies expected. ATLL director Dr Michael Girling will remain as head of the laboratory operations and Needham Chalks director Richard Blew will continue in his role in charge of quarry operations and product sales.
Paul McCartney comments, “This has been a bit of a whirlwind time for all of us following the sudden death of David. However we certainly chose the right people to help us through it. Peter and Robert at Prism proved their experience, found the right buyer and negotiated a deal structure that ticked the boxes for all concerned. It’s also reassuring for David’s family to know that the businesses are now in the right hands for them to further flourish in the future.”
Peter Watson from Prism Corporate Broking adds, “It’s not every day that we come across a number of quarries to sell, however we are delighted with the outcome. Although this had been highly complex sale it did run smoothly, helped largely by the considerable amount of preparation Paul McCartney made for the sale. He and his team tidied up loose ends to ensure the business could stand up to the rigorous due diligence process. In situations such as this where you have a long-standing company (founded in 1947) with substantial and unusual properties, there are inevitably an enormous range of factors that need to be checked. The businesses were also part of a group structure with two separate holding companies – this merely added another dimension to for us all to contend with.”