Ben and Jason, congratulations on your successful MBO of MTE Heat Treatment. Can you describe the journey that led to the decision for a management buyout at MTE Heat Treatment and what motivated you both to take this step?
Jason: I began as an apprentice working within both the manufacturing and Heat treatment departments, working up to become a key figure within the company. Trusted by the customer, I had a fundamental understanding of the company, customer base, suppliers, and processes, with a key specialism within the metallurgical sector. To be given the opportunity to become owner was a great opportunity and the next logical step on the journey.
The motivation was to visualise the potential of the company over the years and make it a reality.
Ben: I always had the ambition to own my own business; I've planned my career to ensure when the opportunity came, I'd have the right knowledge and experience to make it successful. This started by training in practice to become a Chartered Accountant, moving into a large business to gain world-class best practice experience, and then onto SMEs where there is substantially greater breadth to the role. It was clear when I first met the previous owners that they were looking for an exit, and the timing was, therefore, ideal for both sides. Along with Jason, we could see we had all that was needed to buy the company and take it forward.
Following the MBO, what are your immediate and long-term visions for the company, and how do you plan to achieve these goals?
Our vision is to create a socially responsible business, sustained by profitable business units enabling continued investments to remain leading edge and there to support colleagues and customers for the future.
The plan for this is to diversify the customer base, embrace the local community and provide empowerment for our employees. This drive will provide enhanced knowledge, support and understanding to create the trust and security both company employees and customers.
To incorporate industry practices 5S and Lean techniques into daily operations to provide a better-quality working environment for employees to work in and a cleaner, more visibly controlled environment for customers to walk around, giving greater confidence in operations and controls.
What do you perceive as the biggest challenges and opportunities in leading post-MBO, especially in the current low growth economic climate?
The environment, the continued drive for carbon neutrality and changing dynamics within the industry. The drive to reduce gas usage due to supply shortages and escalating costs providing a need for greater efficiency within daily processes whilst keeping aligned with technological advancements to determine the best route forward.
Skills shortage within the industry, compounded by government set minimum wages levels, continuously reducing the gap to the skilled workforce. The skilled members deciding to retire and the desire for younger workers to take up apprenticeships reducing, the industry sector not being part of the education school curriculum meaning lower numbers of people entering the industry and those that do having little understanding.
The key opportunities come with working alongside major customers, suppliers, and competitors alike within the heat treatment sector and alongside the industry body, the Contract Heat Treatment Association (CHTA), to maintain the expertise within the sector but also work out collective solutions for government-driven change initiatives.
How did working together as a duo influence the dynamics and decision making process during the MBO of MTE Heat Treatment, and what strengths did each of you bring to the table that was pivotal in successfully navigating this transition?
The strengths of each are split into the key categories for business success within this sector: financial acumen and technical expertise. Ben, with a background in finance, is able to navigate with lenders, and I have technical expertise that gives reassurance that stability and knowledge remain within the business.
Working together with a shared vision was pivotal in maintaining the focus to complete the deal, to overcome the challenges set out from the selling party whilst handing over the day-to-day operations and customer liaison.
How has the MBO impacted your employees and other stakeholders, and what steps are you taking to ensure a smooth transition?
There was a mixed response from employees; some were initially very excited, whereas others were initially sceptical. This is natural and was expected due to the significant change. Our focus has been bringing in lean methodologies and clear business systems, which are key to the empowerment of employees, a vision that the previous ownership did not see value in. Changing the structure to give clear career progression.
Other stakeholders largely embraced the new ownership, giving reassurance of stability. Subsequently, they have valued the focus on continuing development and growth, realising these returns as much for their business as it does for ours and securing a guaranteed future for both.
Are there any new technologies, services, or market expansions that you are particularly excited about implementing in MTE Heat Treatment?
Expanding on the processes currently employed, creating new methods to cope with the ever-changing demands whilst striving for a carbon-neutral future.
The focus to enhance the skills within the company to cope with the diminishing skillset with which MTE rely on through its suppliers.
The continued drive to improve the management systems to enable access into new market sectors, each with its own set of new challenges bringing excitement and desire not only into us but also into the workforce.
As new owners of the company, can you share your joint leadership philosophy and how it will influence the company's culture and operations?
People – Respect, morale and motivation. The strength of the company is the people. Capturing knowledge, experience, and expertise, we drive ambition and continuously improve working practices.
Customer service – Our strength is your performance, which is the company strapline. The ultimate test of our processes and capabilities lies with the performance of the customer.
Management processes – Report and monitor what matters. Provide concise, clear information and visibility throughout the organisation, ensuring colleague engagement in a sustainable, socially responsible future.
Continuous improvement – We are committed to the continued development of technology and reinvestment in the pursuit of improving our products, processes, and service levels to enhance value for customers and the company.
What have been some of the most valuable lessons you've learned throughout the MBO process? And how will these lessons ultimately benefit MTE?
Investment in time is needed to ensure the time is taken to understand the details, even those not at the forefront.
Trust – trust in the external advice, trust in each other, trust in the systems.
The ability to work together and trust the judgements of each other has been key in working through the MBO and now as we move forward, the ability to grow and develop successful business systems, will see MTE move forward in a leaner more structured and skilled organisation.
What advice would you give to other professionals considering an MBO, based on your experience?
Get the right advisors to guide you through the process, this is key to understanding what is next. The process takes time, and regular (weekly) status updates stops the process from stalling. Also be prepared to walk away, whilst you are investing significant time and money that you may not wish to lose the whole deal still needs to be commercially viable. Understand the risk, taking into consideration the personal contribution, financial, physical, and mental.
