how we can help

Deciding to buy a business is a major decision, and not one to be taken lightly. Any acquisition, whatever the size, will represent a major investment in time and resources, and before you decide to start the acquisition process you need to ascertain whether buying a business is right for you. We can help you to consider the many different issues including:

• Deciding to buy
• The acquisition process
• Finding and approaching suitable target businesses
• Project management and negotiation
• Valuing the business
• Financing the deal
• Identifying any key contractual terms
• Heads of terms
• Due diligence
• The final contract and beyond

here at the beginning and still going strong

BACK in 1900 there were 79,000 looms in Burnley, more than one for every man, woman and child in the town. Today only 22 looms remain and they all belong to John Spencer Textiles Ltd. Current owner David Collinge is the great-great-great grandson of the founder, John Spencer.

David reflects: "We were here at the beginning and still going strong! I suppose we’re more stubborn than anybody else!" As business after business has closed in Burnley, John Spencer has ended up as the last bastion. Another secret of its business survival is that the firm has not restricted itself to one product. So, while others have failed when their line has lost popularity, John Spencer has simply switched to weaving another line.

"Cassons have been advising my family business for several generations. When we bought Ian Mankin Fabrics last year Cassons saw to all the financial accountancy work on the buyout and it went smoothly."

David Collinge

Most of the weaving John Spencer does today is industrial fabrics for UK firms. For example, its fabrics go into components in the car industry. David explains: “Our instinct when a customer phones with a request is to say yes and then work out how to do it. Flexibility and versatility is really the secret to our survival.”

John Spencer Textiles more or less kitted out the British Army in desert camouflage for the Gulf War. But recently the government changed its purchasing policy and today, nearly all army uniforms are made in the Far East. Interestingly France and the US pursue a protectionist policy when it comes to army uniforms. In the UK only clothing of strategic importance is protected. Significantly nuclear protection suits and parachutes are still manufactured by the Burnley firm. Nurses uniforms, another former staple of the firm, are now, however, almost all imported.

Following their tradition of versatility, John Spencer Textiles has now switched its emphasis to industrial and furnishing fabrics. Recently the company bought London-based Ian Mankin. This was an important strategic decision for the company as it gave them a very strong retail business. As well as the website and catalogue business it also gave them two retail outlets in London. David says: "We can make a virtue of the fact that everything we sell through our retail business is made in the UK and we have control over it. Cassons saw to all the financial accountancy work on the buyout and it went smoothly."

Cassons partner Steven Greenwood explains further: "In this particular instance we did not need to help our client find a business to buy as Ian Mankin was already an established customer of John Spencer Textiles. Indeed we were delighted to see this move to protect the retail channel and also the opportunity it gave for future expansion."

"We worked closely with David on the precise terms of the contract. In particular there were some property issues relating to the retail outlets that had to be addressed. We went down to London to carry out the due diligence. Ashley then liaised with the seller’s solicitor on all of the issues in the final contract. We also had to review and indeed change the structure of John Spencer Textiles Group. This was partly to facilitate the purchase and also to make the deal as tax-efficient as possible. I’m pleased to report that it all went through very smoothly!"

Since the acquisition David and his team have been working hard to expand their range of products and are now diversifying into soft furnishings which of course are made with their own textiles and sold through Ian Mankin. Steven commented: "We have worked with John Spencer since David’s father Mark was running the business and in fact theirs was the first audit that a very young Les Nutter went out to, supervised by Ashley Hayman! It has been wonderful for us all to see how David has brought the company into the 21st century with the fully computerised weaving shop and developed it still further, following his keen commercial instincts. That’s how he has managed to survive and indeed thrive."

Further evidence of moving with the times has been the introduction of organic production. John Spencer Textiles is the only organic mill in the UK approved by the Soil Association for cotton and linen fabrics!