Price Bailey, the chartered accountants and business advisers, have advised the management team of Professional Music Technology (“PMT”) on its management buyout of the business.
Founded 28 years ago by Simon Gilson and Terry Hope, PMT is the UK’s leading multi-channel retailer of musical instruments and professional audio products. The business operates through 15 stores across the UK and has a growing web presence at pmtonline.co.uk. PMT employs more than 200 staff across its business and generates revenue in excess of £40 million per annum.
Price Bailey initially negotiated deal terms between the outgoing shareholders and MBO team before seeking funding from private equity and debt providers and managing the process to completion. This was a multi-layered transaction which involved a wide range of expertise across multiple Price Bailey teams in order to deliver a successful result for all parties. Price Bailey’s involvement encompassed:
- Deal structuring and negotiation between the vendors and MBO team
- Preparation of historic management accounts and the creation of an integrated financial model and business plan
- Introduction to and negotiation with credible UK-based Private Equity and debt funders
- Deal structuring and tax clearance for the proposed transactions
- Continued outsourcing compliance support for monthly management accounts
- Advisery on remuneration and share options
- Management of a comprehensive due diligence process including financial, tax, legal, commercial and HR due diligence
- Advisery on FCA change of control
- Negotiation of legal documentation and project management to completion
- Advisery on VAT recovery
Financing for the deal was provided by YFM Equity Partners and the founders of the business.
The buyout was led by David Black, who becomes Managing Director of the business. David first joined PMT some 18 years ago and has had day-to-day leadership responsibility for the business over the last four years, having opened six new stores in that time. David is supported in the buyout by Carly Scott (Commercial Director) and Andrew Ball (Operations Director), who joined the business in 2010 and 2012 respectively. The Board will be supplemented by Peter Moss, who joins as Finance Director, and brings strong industry experience. David Garratt, former CEO of Wex Photo Video, the leading multi-channel retailer of photographic and video equipment joins the Board as non-executive Chairman.
Over the coming years, David Black and his team plan to take advantage of the continued strong demand for musical instruments and pro-audio products from hobbyists and professional musicians alike. The business will focus both on the selective opening of new destination stores and the further development of its multi-channel proposition.
Simon Blake, Partner at Price Bailey, comments: “This was a complex deal, which involved a project team at Price Bailey with a wide range of expertise, including lead advisery, tax advisery, compliance, project management and financial modelling. The new management have ambitious plans for this exciting business which has defied the gloom on the High Street, while increasing its digital footprint and gearing up for international expansion. We are delighted to have assisted the PMT team in getting ready for the next stage of its journey.”
David Black, Managing Director of PMT, commented: “I am very pleased to complete the buyout of PMT with the rest of the team. The founders have done a fantastic job of establishing a market-leading position, and we look forward to building on that in the future. Price Bailey was instrumental in weaving all the threads of this complex deal together whilst helping the business with back office, outsourcing support. I would like to thank Simon and his team for their calming approach and for doing a fantastic job.”
Management were advised on the transaction by Simon Blake and Mark Rowntree from Price Bailey who acted as lead advisers to David Black and introduced YFM Equity Partners. James Allen and David Hollier from Birketts provided Legal support.
About Price Bailey
Price Bailey is a top 30 accountancy practice specialising in providing accountancy, tax and business advice to enable the growth of regional, national and international businesses. In addition to traditional accounting services, the firm has a range of specialists in many areas which combine to provide a complete, integrated business offering. These include tax consultancy, corporate finance, strategic planning, insolvency & recovery and employment law.
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