MBH Corporation is a buy-in business rather than a buyout specialist.
In short, it acquires well-run companies that have a long track record of success – sometimes in some ‘unsexy’ sectors.
Management is probably not so much looking for the exit as attempting to get to the next level; or is trying to secure the option to sell-up at some later date if it wants.
Crucially, while MBH provides the central administrative functions, the owners then carry on managing their creations.
All deals are done an earnings accretive multiple of around five times earnings before interest and tax (EBIT) – and there is a perpetual share earn-in linked to the profitability of the company.
So, the model rewards long-term ownership and commitment.
MBH itself is a British public limited company that adheres to the gold standard corporate oversight of the UK Listing Authority.
How it’s doing
In March, MBH made its 25th acquisition, strengthening its transport arm with the acquisition of Cambridgeshire-based taxi business 4X.
The new addition is a long-established company with a fleet of more than 100 vehicles and contracts with local schools, hospitals, prisons and local businesses.
These contracts have generated a steady revenue during the pandemic with revenues in the year to July 2020 GBP1.8mln and underlying profits [EBIT] of GBP0.2mln.
The 4X business will be part of Take Me [Formerly ADT Taxis] as a tactical acquisition following MBH acquiring Take Me in 2020.
What the boss says: Callum Laing CEO
“We’re delighted to expand our transportation vertical and welcome 4X onboard.
“We have been hugely impressed with their proactive solutions to the challenges presented over the past 12 months, plus their commitment to EV and environmental concerns.”