Aero Stanrew is one of the UK's leading designers and manufacturers of specialist electronic components for the global aerospace industry.
With a workforce of 190, Aero Stanrew supplies complex electromagnetic modules and electronic systems to blue chip customers including Rolls Royce, GE, Goodrich and Thales from its headquarters in Barnstaple, Devon, and manufacturing its site in Tunisia.
In February 2012, a four-strong management team, led by managing director Clive Scott, acquired a majority stake in the company following the £8.5 million MBO which was backed by WestBridge Fund Managers (WestBridge Capital). Aero Stanrew was advised by Michelmores and Momentum Corporate Finance on the management buy-out process.
Clive Scott and his team - Chris Evans, Owen Rolfe and Peter Vaughan - mounted the buyout after being with the company for a combined total of forty years. At the time of the purchase Clive Scott said: "Although Aero Stanrew is already in a very strong position with a strong order book and recession resistant business model, this deal provides us with the opportunity to pursue ambitious plans for further growth."
12 months into the management buy-out we ask Clive Scott how life has been for Aero Stanrew.
What have been the highlights for Aero Stanrew since the management buy-out took place?
Twelve months in it has been pleasing to deliver performance ahead of our original business plan. This year we are budgeting for further outperformance, partly due to our increasing critical mass allowing us to take on larger programmes. Our outperformance has allowed us to reinvest in further business development – we are actively exploring export opportunities in the emerging economies at the moment that could yield some real long term growth.
One of my personal goals at the time of the buy-out was to raise our profile to more accurately reflect what the business has become – a leader in several areas of business. As such we are very proud to have won a number of awards since completing the management buy-out, including the South West Insider Company of the Year and Aerospace/Defence Company of the Year at the Made in the South West Awards.
We were delighted to receive our SC21 Bronze award at a ceremony in Belfast. This award was established in 2006, and out of several thousand companies in the UK Aerospace & Defence Supply Chain, 610 companies are working towards an award, and only 104 have achieved this, (74 Bronze, 27 Silver, and 3 Gold). It was quite clear from the event in Belfast that future supply chains will be made up of SC21 award holders, and it is therefore key to our business to hold this accreditation.
We were recently featured in a national advertising campaign undertaken by HSBC during November and December 2012. The campaign highlights the support the bank has given in support of our overseas expansion. As well as appearing in various national titles such as the Daily Telegraph, the Daily Mail and the Sunday Times, the advert has also run on national radio stations such as Classic FM and Talk Sport.
How have you found working with a private equity investor?
We are particularly pleased to have backing from WestBridge Capital because the team there already has a proven track record in our sector and have a refreshing approach to investment.
Westbridge Capital has a network of industrial investors who deliver practical, hands-on advice and guidance that is borne out of experience. It's truly an added-value service that provides much more than just money.
Through Westbridge I have been able to compare experiences with other like-minded businessmen who understand the challenges and benefits of working in a fast moving and high growth environment.
What are you plans for the company going forward?
We are a business that has experienced significant growth over the last few years, even at a time of economic uncertainty. Our plans for the business are ambitious but realistic, and I have a vision of us being a global leader in our specialist field. To achieve this we have to perform to some very demanding standards and be very tuned in to what our customers want from us.
Our growth has involved us in significantly increasing our workforce, we now have 190 employees, up from 155 only a year ago.
Much of the work we do is highly specialised and as a result we have to invest a lot of effort in employee training and development. We are very lucky in that we have a very dedicated workforce – it's great for them to receive external recognition for the hard work they have contributed to our on-going success.
One of the benefits that we have reaped as a result of our success is that we can now more readily attract a high calibre of new employee. This is very important to us as our growth has meant that we are constantly looking for additional staff who are capably of developing as we develop.
What advice do you have for any other management teams who are considering making a management buy-out?
Our buyout has been a success because we were very clear at the outset what we were looking to achieve and agreed clear and realistic plans with our partners. A buy-out inevitably means a relationship with your backers of several years so it is important to ensure that you are going to be able to work effectively together. This was a key attraction of Westbridge over alternative funding sources.
The buyout process will involve a lot of hard work and personal sacrifice to get the deal done but the potential rewards make the whole process worth-while. I cannot over-emphasise the importance of getting good advisors on board to help you complete the process as you will come across many situations that you will not have dealt with before.
My main advise would be that if you’ve got a clear vision for the growth of the business – go for it!