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SME Finance – lead advisor in Reel Label Solutions MBO

30th May 2022

SME Finance Partners were the lead advisor in the Management Buy Out of Reel Label Solutions in a deal funded by Development Bank of Wales.

Reel Label Solutions is a printing specialist founded in 2002 by Jonathan Wright, Chris Duffin and Paul Prothero, employing 27 at its base in Pontyclun.

DBW has invested £1.2m through a combination of debt and equity, enabling former Sales Director Jonathan Wright to increase his shareholding and become Managing Director, with a partial exit for Chris Duffin who will remain with the business and a full exit for Paul Prothero.

Jonathan Wright explained: “Chris, Paul and I have worked tirelessly over the last 20 years to build the business.  We’ve got a very loyal and hardworking team who have played a significant role in helping us get to where we are today.  We’ve always been mindful of the need to think long-term about our succession planning.  DBW enabled us to structure a deal that was right for us as individuals and the business as a whole, providing a sustainable future for the entire team her in Pontyclun”.

Chris Thomas, co-founder of SME Finance Partners advised the Management Team throughout, negotiating the deal and securing the funding from DBW.  Commenting on the deal, Chris said “It was a real pleasure working closely with Jon & Chris on this, successfully securing a deal in which everybody benefitted.  That’s what’s really pleasing in structuring a good MBO – everyone’s aspirations, management, exiting shareholders and funders, can all be factored in.”

Jonathan Wright said “We’d like to give a massive thanks to Chris for all the work he did to get the deal done, as soon as we met I knew I could trust and work with him, he guided us throughout and we couldn’t have done it without him”.

The investment by the Development Bank of Wales was structured by Deputy Fund Manager Joanna Thomas and Investment Executive Scott Hughes. They said: “Jonathan, Chris and Paul have built a robust and sustainable business that is on target to achieve a turnover of £3.5 million this year.  With unrivalled experience in the packaging printing industry and a reputation for being able to deliver high quality labelling, there is capacity for further growth and the creation of more jobs over the coming months.  In this deal we’ve been able to retain ownership of Reel Label Solutions in Wales; helping Jonathan to take over the reins and keeping the business local. Importantly, we have given the business additional headroom for future growth by enabling them to invest in new equipment and machinery.”

Betsan Powell from JCP Solicitors provided Legal support Management, with Geldards acting from DBW.  Financial Due Diligence was completed by Tanya Wilson of Haines Watts, with tax advice provided by Mary McDonagh of Kilsby Williams.

The Reel Label Solutions MBO is the latest in a line of MBO’ that SME Finance Partners have advised on in the last 12 months, following recent deals at Hornbill Engineering, Kinetic Pixel and BMW Ltd.