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Mundays & Menzies secure the sale of Kem Edwards Limited to FTSE 150 Company

1st September 2008

Mundays LLP and Menzies Corporate Finance Limited have successfully advised and supported the shareholders of Kem Edwards Limited in the multi-million pound sale of the entire issued share capital of the company to FTSE top 150 company, SIG Plc.

Kem Edwards is an industry-leader in the supply of tools, fixings, site equipment, mechanical and electrical components and offers an off-site pre-fabrication service to the construction industry.  The company has been in business for nearly 40 years and is headquartered in Sunbury-on-Thames.

With annual sales of £2,455.2 million (2007) SIG plc is the leading European supplier of insulation, interiors, roofing and specialist construction products. The company operates from 15 European countries, serving its customers from over 800 prime trading locations.

As part of the acquisition, Richard Edwards will continue his work for the company in the role of managing director.

The Mundays team was led by Alex Young (Corporate), assisted by Kate Galloway-Hale (Commercial Property) and Nick Atkins (Corporate). Alex Young of Mundays said,

"The sale presented a number of challenges with a grant of probate and detailed property arrangements required. It was a pleasure working with Menzies again and providing tailored advice to meet the clients’ deadlines, as both our firms specialise in advising owner management businesses.

By understanding the culture of the business and preparation, our firms were able to negotiate a smooth handover for the private company becoming part of a plc group in terms of transitional arrangements.”

The Menzies team was led by Steve Mitchison, assisted by Terence Gale, Richard Godmon (Tax) and Jackie Richmond (VAT). Menzies project-managed the transaction, valuing the company’s shares and advising on the tax issues arising from the sale, working closely with Mundays. Advice was given by Mundays on obtaining a grant of probate to complete the sale, and the transaction was handled in such a way as to be able to complete within a timeframe that enabled the sellers to take advantage of the pre-5 April 2008 capital gains tax regime.

Commenting on the transaction, Steve Mitchison said:

“There are strong synergies between Kem Edwards and SIG plc, and the Kem Edwards brand will add further value to SIG’s own strong market position. We have represented the seller for many years, and are pleased to have been able to offer advice and support throughout the lifecycle of the business and to have now helped in realising the true value of a very strong and respected business.”

Richard Edwards, MD of Kem Edwards said:

“Both teams at Mundays and Menzies provided proactive, clear advice as well as invaluable professional insight in progressing what became a quite complex transaction.”
Simply put, they did everything they said they would do and more. They really exceeded our expectations”.

Mike Grayer, Head of Menzies Corporate Finance, believes the vendors of privately owned businesses still offer value to potential purchasers, even with the current market conditions:

“Kem Edwards is exactly the kind of business we work with day-to-day, and the type of transaction Menzies understands so well.

We are still seeing a lot of purchaser interest for the privately owned business, but purchasers are becoming more demanding and placing greater emphasis on evidence of consistency and stability in the company’s growth. This is where our experience and advice if used at an early enough stage in the negotiations can really help drive a deal to completion. The opportunities exist, it’s just a matter of putting effort into the preparatory work first to help deliver this success” explains Grayer.

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