Successful exit following management buy-out

Find out how Development Bank of Wales supported our business growth strategy.

March 2021

The Development Bank of Wales has successfully exited ALS Managed Services just two years after providing financial support to fund a management buy-out.   

Chief Executive Steve Lanigan led the management buy-out (MBO) of ALS Managed Services in September 2018, four years after the business was first established in 2014. The £625,000 of loan and equity funding from the Development Bank of Wales formed part of a combined £1 million finance package that enabled the management team to buy-out the founding shareholders. At that time, the Development Bank of Wales took a 20% equity stake in the new company. This has now been bought back by ALS. The return for the Development Bank of Wales has not been disclosed.  

As a leading recruitment firm specialising in the UK wide recycling, warehousing, distribution and manufacturing sectors, ALS has a blue-chip customer base including major national companies. Revenue has more than doubled since the management buy-out with the businesses expecting to exceed £50 million turnover in the current financial year.

The investment by the Development Bank of Wales via the Wales Management Succession Fund enabled the company to relocate to a new 3,500 sq ft office at Van Road Business Park, Caerphilly and grow the team from 17 to 46 including three new Board Directors through strategic hires and internal promotions.  Joe Morris (Operations Director), Tom Diamond (Commercial Director) and Nicola McDonald (Sales Director) bring extensive experience to help propel the business on its next phase of growth, including an evolution of the brand and change of name to ALS People, which the company says is a fitting reflection of its values.

The Development Bank of Wales has also helped introduce ALS to the London Stock Exchange Group’s Elite programme, providing international business support and opportunities for capital raising. Elite provides an ecosystem for fast growing organisations; helping the most ambitious private companies scale up, structure for the next stages of growth and access capital.

Chief Executive Officer Steve Lanigan said: “The support from the Development Bank of Wales was about so much more than just the money. They’ve believed in us every step of the way and stood by our side from when we first started preparing for the MBO some four years ago; providing support, guidance and advice to allow ALS to flourish.  Through that support, we’ve been able to achieve remarkable progress over the last two years; more than doubling revenue, growing the team and mobilising some significant national contracts in the UK recruitment market.  Our substantial growth in 2020, despite the impact of Covid-19 on the general recruitment sector, has put us in a strong position for the future.

“I know that some business owners are reluctant to sell equity because this may result in loss of control but at no stage have we felt this with the Development Bank as our funders. They’ve genuinely pulled out all the stops to help us deliver transformational growth that now means we’re in a position to repay them with a good return on their investment and move forward with the security of an exceptionally strong business behind us.”

“Joining the Elite programme has also helped as we benefit from a vibrant community of entrepreneurs, advisors, investors and key stakeholders as we prepare for the next phase of our growth strategy.

“I am personally so grateful to everyone who has been part of our journey over the last few years. These are tough times for lots of people but by working together we have performed incredibly well and exceeded all expectations. We’ve got an exciting future ahead as we continue with our growth strategy including the potential of acquisitions. ”

Sam Macalister Smith is a Portfolio Executive with the Development Bank of Wales. He said: “ALS is a text book example of how our equity packages can finance management succession plans and help great businesses to achieve great things. As Chief Executive, Steve has remained resolute; recruiting and nurturing the very best people in the industry, driving growth and taking advantage of every opportunity that we’ve been able to offer, including Elite.

“We are hugely proud of all that Steve and the team have achieved and we hope that others will take inspiration from this success story. Importantly, we will continue to support the business as they continue with the next phase of their journey.”

The £25 million Wales Management Succession Fund is financed by the Welsh Government and Clwyd Pension Fund. Loans and equity investments between £500,000 and £3 million are available.