A management buy-out of Stoke-on-Trent-based Johnson Tiles has been completed, paving the way for production at the 123-year-old firm to move overseas.
The management team has assumed full control of the £35 million turnover business having acquired it from former owner Norcros Plc with the full support of all parties.
The team, led by Managing Director Stephen Dixon, Commercial Director Rich Kelsall, Procurement Director Jason Bridges and Finance Director Melanie Birks, now intend to push ahead with a fully outsourced model to safeguard the business’ future.
In April, Daily Focus reported that the tilemaker was poised to end production at its factory in Tunstall. All 105 staff employed in that area of the business are affected and are being consulted.
The new owners say the company will remain a significant Staffordshire employer and a UK leader in the design and supply of tiles.
The deal, which precedes a comprehensive restructuring of the business in order to safeguard the future of the respected British brand, was led by Chris Silverwood and Tony Norwood, partners at Harrogate-based corporate finance and restructuring firm CorpFin.
An £8 million revolving credit facility was sourced by CorpFin from Allica Bank, led by Ian Flaxman, head of growth finance, to provide working capital facilities to the new operation.
“In a challenging time for UK manufacturing, the future of the business demands a root and branch review of strategy in order to establish new firm foundations for success, and the MBO enables the first stage of that process,” said Chris Silverwood of CorpFin.
Tony Norwood added: “This was a highly complex situation successfully navigated due to the collaborative and pragmatic approach of the management team and Norcros, both of whom recognised that an MBO was in the best interests of all staff, customers and shareholders.
“The transition to a fully outsourced model, alongside the secured funding package, will allow Johnson Tiles to maintain its market leading position following the buy-out and ensure that the company is ideally placed to benefit from future growth.”
In a previous statement Managing Director Stephen Dixon said the announcement to outsource and close the Stoke-on-Trent manufacturing facility was taken with “very mixed feelings.”
He said: “It is with a heavy heart that we are looking to stop production at the Stoke plant but the cost of making tiles in this country – despite ongoing investment – has become increasingly unsustainable.”
Just wondering how they will remain ‘a significant Staffordshire employer’