A recruitment firm has bought back a 20% stake held by the Development Bank of Wales.
Chief executive Steve Lanigan led the management buy-out (MBO) of ALS Managed Services in September 2018 – four years after the business was established.
The buy-out was financed with a £1 million package from the Development Bank of Wales, made up of a £625,000 loan and equity deal. At that time, the Development Bank of Wales took a 20% stake in the new company.
This has now been bought back by ALS, although the return for the Development Bank of Wales has not been disclosed.
The investment by the Development Bank of Wales, via the Wales Management Succession Fund, enabled the company to relocate to a new 3,500 sq ft office at Caerphilly Business Park, Caerphilly.
It also helped the company grow its team from 17 to 46 including three new board directors – Joe Morris (operations), Tom Diamond (commercial) and Nicola McDonald (sales).
A leading recruitment firm specialising in the UK-wide recycling, warehousing, distribution and manufacturing sectors, ALS has a blue-chip customer base including major national companies. Revenue has more than doubled since the management buy-out with the businesses expecting to exceed £50 million turnover in the current financial year.
The Development Bank of Wales has also helped introduce ALS to the London Stock Exchange Group’s Elite programme, providing international business support and opportunities for raising capital.
ALS chief executive Mr Lanigan said: “The support from the Development Bank of Wales was about so much more than just the money. They’ve believed in us every step of the way and stood by our side from when we first started preparing for the MBO some four years ago; providing support, guidance and advice to allow ALS to flourish.
“Through that support, we’ve been able to achieve remarkable progress over the last two years; more than doubling revenue, growing the team and mobilising some significant national contracts in the UK recruitment market. Our substantial growth in 2020, despite the impact of Covid-19 on the general recruitment sector, has put us in a strong position for the future.
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“I know that some business owners are reluctant to sell equity because this may result in loss of control but at no stage have we felt this with the Development Bank as our funders. They’ve genuinely pulled out all the stops to help us deliver transformational growth that now means we’re in a position to repay them with a good return on their investment and move forward with the security of an exceptionally strong business behind us.”
Sam Macalister Smith, portfolio executive with the Development Bank of Wales, said: “ALS is a text book example of how our equity packages can finance management succession plans and help great businesses to achieve great things.”
He added: “We are hugely proud of all that Steve and the team have achieved and we hope that others will take inspiration from this success story. Importantly, we will continue to support the business as they continue with the next phase of their journey.”
The £25 million Wales Management Succession Fund is financed by the Welsh Government and Clwyd Pension Fund. Loans and equity investments between £500,000 and £3 million are available.
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