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Michael Spencer - TEW Engineering

Inspired by a meeting with BCMS, Michael Spencer put Plan 60 into place – a long-term strategy to get his business in shape for a sale. Here, he explains what happened next…

With a history stretching back to 1914, TEW Engineering Ltd specialises in the provision of application engineering solutions, with expertise across the entire engineering lifecycle, from design and manufacture to installation and commissioning. In 2013, when Managing Director and 100% shareholder Michael Spencer took the decision to sell, the company serviced a client base of some of the biggest names in the rail, automotive, and food and beverage industries, including Babcock, London Underground, Coca Cola, Rolls-Royce, JCB and Tesco.

Michael, then in his early forties, had a clear sense of his business and its market position. “Selling up was part of a five-year plan,” he says. “I first attended a BCMS masterclass in 2009, at which point there was no timescale or burning desire to sell the business. But I went along because I thought it would provide very good background information.”

Understanding the importance of effective preparation for sale, Michael began to look at his business pragmatically, undertaking a detailed SWOT analysis. “After we met BCMS, I wrote something called Plan 60. This was literally a 60-month plan to address any items that needed addressing to get the business into the most competitive, desirable state for sale and then sell the business. Over the next four years, we put all of those items in place.”

“We were growing rapidly, but there were still plenty of further opportunities for growth for which we would need much more resource…”

Planning pays dividends

Plan 60 meant a step-change in the business model. “We decided to cease our signs business and to concentrate more on the rail and automation sectors of the company. We also went through a rebranding exercise. We started to do far more marketing than we had ever done before. We put certain KPIs in place and invested further in the business premises via rebranding and repurposing the building, starting with the customer-facing areas, and basically became very, very slick. The image to the customer was very compelling and very impressive and that led to more and more work.”

With growing revenues and profitability, Michael found himself with a problem, and one which many business owners experience over the business lifecycle. “We were growing rapidly, but there were still plenty of further opportunities for growth for which we would need much more resource in terms of personnel, skillsets and knowledge. We had grown the business to around £15m, but to go to £30m it was probably best for the rest of the team that we were not learning on the job.”

Resourcing the next phase of growth is a challenge for many BCMS clients, and sometimes other factors are instrumental in taking the decision to seek a sale: “Another reason for selling was a personal one, from a succession planning perspective. I was Managing Director, with a great team of five around me, three of whom would be retiring. We didn’t necessarily have people within the existing business who could step into their roles, and I didn’t want to have to put a new team in place.”

Confidentiality is key

But making the move from planning a sale to actually taking the plunge brings its own challenges, especially as – in Michael’s words – selling is “a sales and marketing job”. How do you approach a wide number of acquirers, without staff, customers and the market finding out? 

“The prospect of going out to 200 people, with a teaser letter that you didn’t need to be Einstein to work out who the target was, filled us with a certain degree of dread. This was because we wanted to keep the sale confidential from our staff as we didn’t want there to be uncertainty. We got lots of reassurance about this from the BCMS team, who said that we would be dealing with larger organisations that have an M&A Director and that they would want to keep the sale just as confidential as we did.

“We went along with one of BCMS’ suggestions, which was ‘we are looking for a partner’. I even went so far as to email the rest of the team to say we are about to go live in our search.”

“We were impressed at BCMS’ depth of knowledge, the depth of the team and how people were brought in at the appropriate time”

At the deal table – and beyond…

As a man who likes a plan, how did Michael feel the sale process was managed?

“Very well. Superbly. We were impressed at BCMS’ depth of knowledge, the depth of the team and how people were brought in at the appropriate time, also the hand holding, if it was necessary, and the reassurance.

“What I liked was the fact that you had the continuity of Simon Glover as the Project Manager, so you didn’t feel that you were being passed from one person to another, but that the right expertise was brought in at the appropriate time.”

There was significant interest in TEW, but from negotiation stage, it was clear one particular organisation ticked a number of boxes. “If we could have outlined who our perfect acquirer was going to be, it would have been someone many times our size in terms of resources,” says Michael.

“Worldwide, our US-based acquirer LB Foster turned over $750m, had approximately 40 offices and manufacturing plants, and employed 800 people – but within the UK, LB Foster had just about the same size turnover as TEW, virtually the same number of people and two offices; one in Sheffield and one in Leicester. So, TEW, being in Nottingham, was in a perfect position geographically.”

The end result was a classic example of synergy acquisition, where the whole is greater than the sum of its parts. “We offered complementary solutions, but at a slightly different level. We went through the projects and we couldn’t find one where we had ever competed. As a result, LB Foster and TEW can now offer their customers so much more, and completely beyond the capability of any known competitor. So LB Foster was an absolutely perfect fit.”


Company name
TEW Engineering
Nottingham, UK
Business activity
Engineering solutions
Reason for sale
Business growth
TEW Engineering Ltd