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Shoosmiths sows seeds for agricultural supplier’s growth

25 March 2008

Corporate experts at national law firm Shoosmiths have helped rejuvenate a 140-year-old agricultural and groundcare equipment sales business.

Its Birmingham office corporate lawyers provided a legal framework to assist Jonathan Budd and Greg Duce untangle a complicated network of more than 160 shareholders during a lengthy and complex management buy out (MBO) of FHB Holdings Ltd (FHB).

FHB is the parent company of Burgess, which operates from its head office in Shrewsbury and branches across Shropshire, Cheshire, Staffordshire and Wales.  It has been supplying agricultural and groundcare equipment – from tractors and mowers to chainsaws and workwear – since the 1900s.

As well as farms, it supplies the larger garden owning general public, councils, utility companies and landscapers with machinery and offers an after sales spares and repair service.

Qualified accountants, Budd and Duce joined FHB in 1996 to resolve a number of financial issues facing the family-owned business. By 2002 these issues had been largely resolved. They recognised a need for further investment in the Burgess business, but were unable to secure it without a mandate from the company’s 160 shareholders.

“It was like trying to run a business with our hands tied behind our backs,“ said Budd, “but then in 2006 the shareholders acknowledged that there needed to be a change of ownership if Burgess was to progress.”

Budd and Duce were invited to bid for the company, and their subsequent offer was accepted.

“There were all these competing demands from shareholders, and as there were so many of them,” said Budd. “It made for an extremely complicated and lengthy process. The amount of documentation and work involved was disproportionate to the size of the deal.”

Shoosmiths partner Geoff Perry said: “An ostensibly straightforward MBO involving a relatively modest amount of money was made very involved by the sheer number of shareholders.

“Having that many in a relatively small company is quite unusual, and it meant we had to structure a public company-style offer to all of them.

“It is pleasing, though, to have completed the deal successfully, and to have played a part in laying foundations for the future of what is a well established, well regarded company.”

For further information please contact:
Name: Alastair Gray
Phone: 08700 864096
Email: alastair.gray@shoosmiths.co.uk

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