Vyta Group Acquires FGD

Gray + Press has advised Belfast-based IT recycling company Vyta Group (formerly AMI) on securing private equity investment and acquiring Essex-based IT disposal company FGD.

Vyta is receiving an investment of around £11 million from MML Ireland, Vyta CEO Philip McMichael, other members of the Vyta senior management team and the FGD founders. MML Ireland will receive a minority shareholding in the group through its investment, which will also see its investment leads – Neil McGowan and Christopher Walsh – join the Vyta Group board. The investment is expected to boost the company’s acquisition strategy throughout the UK and mainland Europe.

Vyta’s acquisition of FGD represents the most recent step in this strategy as it seeks to increase its market share organically at the same time as acquiring IT disposal companies with complementary business aims. As part of its acquisition, FGD will rebrand under the Vyta Group name and its 37 employees will join the company, increasing the size of the team to more than 120 across its network of offices. FGD co-founders Leigh Medhurst and Daniel Elson will become Vyta’s chief development officer and chief technology officer respectively.

Gray + Press advised Vyta Group on tax matters during this process. Vyta was also advised by Tughans and PwC. MML Ireland was advised by Carson McDowell, Gore Grimes, Armstrong TS, SOL Environmental and Leading Resolutions.

 

Lawyer Monthly had the pleasure to speak with Charlotte Press, Partner at Gray + Press to give us some further insight into this transaction:

Can you tell us more about the acquisition and your role in advising Vyta?

What started as a very narrow, one-dimensional role when Vyta were embarking on their journey through private equity investment quickly grew as the level of interest by funds increased, not to mention the additional transaction activity of FGD. Due to our experience of private equity investment and technical tax expertise, we were able to support Philip and his team through the various complex stages and on the tax structuring in particular. As you would expect, businesses of this size do not have the level of spare capacity or technical knowledge needed in-house to navigate such an intense and complex process independently; that is where we as one of the advisors come in to guide and advise.

What facets of tax law had a significant bearing on this transaction?

As with most private equity transactions, there are the immediate tax implications as a result of any restructuring and those that will or could crystallise in the future. We needed to achieve a certain outcome for the shareholders, with particular regard to income and capital gains tax applicable now and in the future, whilst protecting the commercial deal and putting in place a suitable corporate structure from which the new enterprise could operate. One of our key objectives was to provide the entire team with as much certainty as possible that the tax treatment was in line with legislative requirements.

Did you have to overcome any unusual challenges as part of your work?

Each deal presents unusual challenges, but what added to the “excitement” on this transaction was trying to complete the purchase of FGD in tandem. Each private equity transaction will have different participators, commercial components and practical challenges, i.e coordinating multiple people and achieving agreement across the board,s but on this transaction, there was a shared goal I felt everyone was working towards.

What started as a very narrow, one-dimensional role when Vyta were embarking on their journey through private equity investment quickly grew

How did you coordinate your work with the other firms involved in this transaction?

A benefit of working on corporate transactions of this type is that everyone – advisors and clients – are very motivated to move at pace, which helps a great deal. How we all interact is key; I find being very honest on what you can do and cover within a timeframe allows for successful relationships and quick resolution.

In what sense does your role in this transaction fit the profile of your firm?

As a firm, we find our natural fit is with growing companies that are always striving for the next stage. As a partner of the firm, I am passionate about entrepreneurs maximising the value of their company and the return they receive. This is our mission as a firm, and we base everything we do from this mindset. The Vyta transaction, albeit being an investment, is a significant stage on the growth of the company and for putting Philip and the team on the map as a success story, which we were delighted to be part of and continue to support.

Do you expect this investment and acquisition to have a significant impact on the IT recycling industry in the UK and Ireland?

The short answer is yes. There are relatively few key players in this competitive market and, with the financial investment and support provided by MML Ireland and the strong senior management team Philip has been able to embed in the business, the future is very bright for Vyta in this growing market. We very much look forward to the next chapter.

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