Case study
An insider's look at selling a business
This case study gives you a detailed insight into a recent deal we helped to finance.
Find out more
You can read more case studies in Beyond Tomorrow - a guide to selling your business.
- Dantex: the business and the deal
- Company history
- Seller
- Why sell?
- Process
- Advisers
- The role of the bank
- ...in hindsight
- Advice to others
- Dantex today
- Find out more
Dantex: the business and the deal
Dantex supplies printing plates and associated products in the printing industry, specialising in the packaging industry sector. The deal was a management buy-out from a family member.
Company history
Brothers, Richard and Jerry Danon, founded Dantex in 1967. Following their initial career in textiles, they set up Dantex to merchandise fine English worsted. The textile trade in the UK was in terminal decline at this time, and the brothers diversified into the print industry, importing and selling printing products into the UK market. This grew rapidly and, from the early 1970s, the firm entirely focused on the print market. The business grew on the back of supplying specialist printing plates to the packaging print market, eventually becoming master distributor for a Japanese supplier. Dantex today is the largest distributor in Europe for letterpress photopolymer plates, with growing interest in flexographic printing plates and a manufacturer of related plate processors; with overseas subsidiary companies and a network of distributors covering some 30 countries.
Seller
Richard Danon founded the company 40 years ago, and is the Managing Director.
Why sell?
The two brothers had been in business together for 40 years, building one of the leading companies in its field. Jerry Danon, following a difficult period in his personal life, decided that he wanted to spend more time with his partner, travel the world and enjoy the fruits of the decades spent building Dantex. Richard was still enjoying running the business, finding it stimulating, and didn't think it was time to sell.
Process
As Richard recalls, 'It is all about timing. I wanted to take the business on, and in my brother I had a willing seller.' Having jointly rejected the notion of a trade sale, they set about the process of transferring ownership to Richard. From the start, they conducted the process in a spirit of goodwill; as Richard said 'The last thing I wanted was to gain a business and lose a brother, so we structured something that was fair to both of us.' Richard gave Jerry a blank sheet of paper, and asked him to put down what he wanted for his share of the business. Richard found Jerry's estimate equitable and they set about the process of completing the deal. Richard approached his close friend within a well known accountancy firm, who put them in touch with David Mountain, the bank's Head of Structured Debt Solutions in Leeds. The process ran smoothly from thereon in, although inevitably there were odd hiccups.
'Whenever there was a problem, Jerry and I sat down together and sorted it out rather than going through lawyers. There is nothing to fear if you have a good relationship and you both want to resolve the problem,' said Richard Danon.
Advisers
The advisers that Richard Danon used can all be characterised as coming from long, trusting relationships: NatWest had been their bankers for 35 years; a Leeds based solicitors firm, had been advising Dantex for a long period; and their accountants where was also the auditor of the company. Richard had nothing but praise for all the advisers he used, reflecting the goodwill that characterised the whole transaction. The group of advisers 'acted as a team' according to Richard and 'it ran smoothly and finished smoothly.'
The role of the bank
Through the long relationship Dantex had with NatWest, the Structured Debt Solution team knew the strong financial position and track record of Dantex. Nevertheless, it required some creative thinking to come up with the package of financing that was required to complete the deal: 'Our contact, David Mountain, was the creator of this deal, he came up with a great solution. He could see our strong balance sheet and was able to meet our needs.'
...in hindsight
'In hindsight, I wouldn't do anything differently. It was the best option open to us, and it ran smoothly to a conclusion. Our advisers were fantastic.'
Advice to others
'The key to a deal of this sort is timing; choosing the right moment to do the deal. Once the time is right, you should try to be reasonable throughout, looking to sort out problems face-to-face rather than resorting to communication through lawyers.'
Dantex now
The deal was completed in August 2006. The business is performing well and according to Richard, 'We are paying off the loan three or four times faster than required. We are trying to get rid of it as soon as possible, so that next time we take on a loan it will be 'more constructive' to finance an acquisition of our own.' The deal worked out well for Jerry Danon too, and he is enjoying his life of retirement.
Find out more
For more info about how to sell your business please call us on 0800 073 2257.