A Merthyr manufacturer of industrial steel doors has been acquired for £3.1m in a management buy-out backed by the Development Bank of Wales.
The deal sees Design & Supply Ltd. pass to an internal management team comprising Tom Grother, Scott Davies and Damien Regis. Funding comes from the Development Bank of Wales through a blend of debt and equity, with £1.9m drawn from the Wales Business Succession Fund and £1.2m from the Wales Flexible Investment Fund. The transaction secures 65 jobs at the company’s 41,000 sq ft facility on Pant Industrial Estate.
Second management buy-out in company history
This is the second time the business has changed hands through a management buy-out. Design & Supply was founded in 1986 by Terry Stares and incorporated on 14 February 1994. The first MBO took place in 2016, when long-serving employees Kevin Edwards and Chris Weed acquired the company.
Tom Grother, a director at the company, said the repeat structure underlined a tradition of local ownership. “We’re particularly proud that this is the second management buy-out in the company’s history. It reflects a strong legacy of local ownership and long-term commitment to the business, its people and the wider community,” he said.
Grother pointed to the career path of Scott Davies as an example of that ethos. “Scott’s journey from apprentice to owner is a great example of what that means in practice,” he added. Davies started as an apprentice at the firm more than 25 years ago.
Management team takes over
The three directors bring extensive operational experience. Grother, Davies and Regis have all been closely involved in running the business for years. Grother said the deal gives them “the platform to take it forward while staying true to what’s made it successful”. The team’s focus, he said, will be on “building on the foundations laid by Kevin and Chris, continuing to invest in our people and delivering long-term, sustainable growth”.
Development Bank’s role
The Development Bank of Wales, which is wholly owned by the Welsh Ministers, provided both debt and equity through its two dedicated funds. Scott Hughes, senior investment executive at the bank, said the decision to back the transaction with equity was about ensuring continuity. “Design & Supply is a highly regarded manufacturer with an experienced management team and clear growth ambitions. By backing this transaction with equity, we are helping to ensure continuity, safeguard skilled employment in Merthyr and support the business to invest for the long term while remaining locally owned,” he said.
Since its establishment in 2017 – initially as Finance Wales – the Development Bank has invested more than £1bn and created or safeguarded over 50,000 jobs. It provides commercial loans and equity investments across Wales, with a significant proportion of its funding directed outside Cardiff.
Company operations and client base
Design & Supply manufactures a wide range of high-specification steel doors, including fire-rated, security-rated, acoustic and flood-resistant products, under the SIC code 25620 (machining). The company serves customers across the UK and has supplied doors for notable projects including St Pancras International, National Grid sites, Harrods, Canary Wharf and Silverstone Circuit. St Pancras, a major London railway station and Eurostar terminal, operates with robust security systems including CCTV and facial recognition technology. Canary Wharf, a high-security financial district, maintains 24/7 patrols, automatic number plate recognition and a unified security platform. Silverstone, home of the British Grand Prix, deploys up to 350 security staff during major events. National Grid’s London headquarters at One Strand features modern collaborative workspaces.
Legal and financial advisory
Legal advice to the vendors was provided by Knights. Darwin Gray advised the MBO team, while Blake Morgan – a firm with a strong presence in the Welsh banking and finance market – advised the Development Bank of Wales. As part of the transaction, SME Finance Partners is providing fractional finance director support. Rhys Gedrych of SME Finance Partners described the business as “a high-quality business with strong fundamentals, a loyal customer base and a proven ability to deliver consistent performance”. He added: “The MBO team knows the business inside out and is well placed to drive the next phase of growth.”
Merthyr Tydfil, once known as the “Iron Capital of the World” during the Industrial Revolution, has seen the decline of its traditional coal and steel industries. The town’s modern economic landscape now includes strengths in construction, wholesale and retail trade, and professional activities. Manufacturing remains a vital sector across Wales, contributing significantly to exports and employing around 190,000 people.
