Date: 01 October 07
Management of H&L Garages Limited, the Mercedes-Benz commercial dealership, has taken full control of the business one year after a management buyout backed by Endless LLP, the buyout and turnaround fund.
With six dealerships across North Yorkshire, Humberside and Lincolnshire covering sales of new and used trucks and vans, servicing and body repairs, H&L has grown strongly since its MBO in September 2006. This growth has provided the opportunity for management to take full control of the business through a secondary buyout supported by The Royal Bank of Scotland (RBS). At the same time it has delivered an outstanding return to Endless ahead of it closing its second fund in the next 3 months. The deal value is undisclosed.
H&L is trading ahead of plan despite difficult market conditions for the sector following recent legislative changes including the introduction of Euro 4 emissions standards. Sales have been buoyed by new fleet deals and the winning of Evobus servicing contract. This, together with substantial efficiency and productivity improvements, ensures H&L remains a high performer within the Mercedes Benz network.
Endless brought industry expert Tony Timmins into the crucial Chairman's role. Tony has complemented the management team and proved valuable in developing the business, which is now well positioned to enjoy a sustained period of growth under the management team.
Brett Whittingam, Chief Executive Officer for H&L Garages, said: "The involvement of Endless was pivotal when we did the MBO deal a year ago and the business has since gone from strength to strength. Without their combination of funding, expertise and wise counsel we would not have been able to achieve the growth we have seen. With a recognized brand, well motivated workforce and healthy financial position, H&L remains one of the leading Mercedes-Benz commercial operations in the country and we are set for further expansion."
Phil Tate, the Investment Director at Endless who led the latest deal for the fund, said: "We are pleased to have enabled the management team to gain full control of the business only 12 months after supporting the September 2006 MBO from PD Ports. The management team's enthusiasm and commitment to the business should be commended and has been a key driver in delivering this early exit. This is further evidence that the flexible approach of Endless to financing structures can deliver above-market returns in sectors not normally associated with private equity. "
Andy Barraclough, Relationship Director, Corporate Banking at RBS, who put in place the funding line added "H & L is a well run business and the management team has considerable knowledge and expertise in their sector. We are pleased to have assisted Brett and his fellow directors and look forward to helping them on future projects."
The advisers from the original MBO also worked on this secondary buyout - Park Place Corporate Finance (James Stones) advised the MBO team and Ernst & Young (Peter Mummery) provided the due diligence. Legal advice was provided by Walker Morris (Rebecca McCall, John Guggenheim and Peter Considine).