Design & Supply completes £3.1m MBO backed by Development Bank of Wales

Daniel Bevan - Editor

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Merthyr Tydfil manufacturer Design & Supply has completed a management buy-out backed by the Development Bank of Wales, securing the future of 65 jobs and continuing almost 40 years of local ownership.

The specialist steel door manufacturer has been acquired by an internal management team comprising Tom Grother, Scott Davies and Damien Regis. Davies joined the business as an apprentice more than 25 years ago.

The £3.1 million transaction was supported by £1.9 million from the Wales Business Succession Fund and a further £1.2 million from the Wales Flexible Investment Fund through a combination of equity and debt finance.

Founded in 1986 by Terry Stares, Design & Supply was previously subject to a management buy-out in 2016, when long-serving employees Kevin Edwards and Chris Weed acquired the company. The latest deal keeps the business under local ownership.

Operating from a 41,000 sq ft facility in Merthyr Tydfil, the company manufactures industrial steel doors including fire-rated, acoustic, security-rated and flood-resistant products. Its projects have included work at St Pancras, National Grid sites, Harrods, Canary Wharf and Silverstone.

Advisers on the deal included Knights for the vendors, Darwin Gray for the management buy-out team and Blake Morgan for the Development Bank of Wales.

SME Finance Partners will provide fractional finance director support following the transaction.

Tom Grother, Director at Design & Supply, said: “This is a proud moment for all of us. As a management team, we’ve been closely involved in running the business for many years, and this deal gives us the platform to take it forward while staying true to what’s made it successful.

“We’re particularly proud that this is the second management buy-out in the company’s history. It reflects a strong legacy of local ownership and long-term commitment to the business, its people and the wider community. Scott’s journey from apprentice to owner is a great example of what that means in practice.

“The support from the Development Bank of Wales has been about much more than funding. We’ve built a strong relationship with the team, and their backing gives us confidence as we look to the future. Our focus now is on building on the foundations laid by Kevin and Chris, continuing to invest in our people and delivering long-term, sustainable growth.”

Scott Hughes, Senior Investment Executive at the Development Bank of Wales, said: “This investment demonstrates our commitment to supporting strong Welsh businesses through succession using equity investment.

“Design & Supply is a highly regarded manufacturer with an experienced management team and clear growth ambitions. By backing this transaction with equity, we are helping to ensure continuity, safeguard skilled employment in Merthyr Tydfil and support the business to invest for the long term while remaining locally owned.

“We’re pleased to support Tom, Scott and Damien as they take the business forward and build on its long-standing reputation.”

Rhys Gedrych of SME Finance added: “Design & Supply is a high-quality business with strong fundamentals, a loyal customer base and a proven ability to deliver consistent performance.

“The MBO team knows the business inside out and is well placed to drive the next phase of growth. We’re delighted to support them in strengthening financial processes and helping to unlock further opportunities.”

The Wales Business Succession Fund, which supported the deal, provides loans and equity investments of between £500,000 and £5 million for management teams seeking to acquire businesses. The Wales Flexible Investment Fund offers finance packages ranging from £25,000 to £10 million.