Fast growing listed diversified holding company considers funding from family offices
MBH Corporation plc, a UK headquartered listed diversified investment holding company that acquires successful, well established small to medium enterprises across multiple geographies and sectors, is considering the possibility of securing new funding from family offices to help support its acquisition programme. The company says a combination of family offices looking to diversify their portfolios more and huge growth in the sector, means many of these institutional investors are seeking to increase their exposure to the SME market.
MBH Corporation plc currently has 13 companies in its portfolio, four of which were acquired in 2020. It is looking to make several more acquisitions over the coming months, which it does not need outside finance for, but further funding from family offices could enable it to increase acquisitions this year.
At the end of May this year, MBH Corporation PLC released its annual report for the year ended 31 December 2019, revealing it achieved sales growth of 306% to GBP 50.8m (2018: GBP12.5m) and a net profit of GBP3.6m – an increase of 190% compared to the previous year (2018: GBP1.3m). It also confirmed its first dividend of EUR 0.5 cents corresponding to a dividend yield of 1%.
MBH’s target well established companies that are generally debt free, delivering around $1m-$10m US dollars in EBITDA and are generally still run by their founders.
Callum Laing, CEO of MBH Corporation plc: “We are seeing strong interest from family offices that understand the opportunities available in the small business space but haven’t had a financial instrument like MBH to get exposure to the growth in small businesses, with the liquidity of the public markets, until now. We offer them a unique way to invest in successful, well established businesses with an infrastructure that maintains a strong entrepreneurial feel for the companies we own, but the financial and operational support they need to support strong growth.
“There has been a ten-fold increase in the number of family offices over the past 12 years or so, and collectively they manage in excess of $ 4tr. Also, as many family offices modernise thy are increasingly open to investing in fast growing SMEs. Many of the newly founded family offices in particular are the result of successful entrepreneurs who can resonate with the challenges and excitement of investing in growing SMEs.”
By leveraging its unique Agglomeration™ strategy, MBH can create substantial shareholder value through the consistent and accretive acquisition of excellent companies. With Agglomeration™, profitable companies convert their private shares into public shares in MBH Corporation plc at an agreed multiple.
Fixed for 365 days, company owners are then incentivised to accelerate their growth trajectory using the resources of the plc including expertise, skill transfer of best in class practices, cross-selling to other group companies and where appropriate, zero cost funding for new growth projects.
Each group company retains its autonomy by following appropriate corporate and financial governance, and business owners are also incentivised financially to enhance shareholder value. As shareholders, they benefit personally from this.
