Our journey into DSW: Robin Tarling of DSW Bridgewood
Bridgewood, a specialist insolvency and restructuring firm, joined the Dow Schofield Watts network following a management buy-out backed by DSW Capital plc and is the first network member in the Midlands. Robin Tarling, founder and Managing Director, talks about their journey and explains why the DSW model was so attractive.
What were the drivers to join Dow Schofield Watts?
The deal enabled me and insolvency practitioners Andrew Smith and Tom Grummitt to take control of the business whilst also providing an exit for the original investors, who had backed Bridgewood at its launch in 2010. It’s brought in fresh capital and will secure Bridgewood’s succession plan and bring a new dimension to the business. The buy-out has been an ideal scenario for all concerned.
Have you pursued/investigated other options?
We knew at some point we would need an exit for our seed investors, but we weren’t actively looking. We were too small for private equity or regular funds, and in our line of business, it’s usually a trade sale which is notoriously difficult. They can be unappealing due to the commercials around the deal, synergies and taking out costs. From what I’ve seen, it isn’t always a great result for the employees but good for the shareholders. We didn’t want to become part of a big, centralised machine as it was important to retain our legacy and have the team feel part of the organisation moving forward. The DSW deal ticked all the boxes for Bridgewood.
Who found who?
It was actually via one of the DSW Corporate Finance partners. He’d contacted his contacts as part of DSW’s strategic recruitment campaign to see if anyone knew of any businesses that might want a discussion. One of our investors received an email and immediately saw the opportunity for Bridgewood – and the rest is history.
How was the transaction process?
It has been a smooth, timely and seamless process with DSW. They have been responsive, quick to understand our business model, and their emphasis on strong cultural synergies was critical in informing our decision to join the network.
They were very creative in how to structure a deal. We needed to enable Tom and Andrew to become equity holders; as insolvency practitioners, they are critical to our business model. Insolvency firms are usually started up and run by insolvency practitioners, but in our case, the practitioners were paid employees.
The creative funding solution via the MBO enabled a much fairer share capital distribution. If private equity had looked at Bridgewood, the share capital distribution would have been far lower. As part of the deal, DSW wanted to take only a minority stake in the new LLP created via the MBO, and this really resonated with us. They’re in the business of putting together funding solutions for network members whilst enabling the people running the business to own the business too. It is very different to how a trade sale could have eventuated.
James Dow (Owner/Co-Founder) and Nicole Burstow (CFO and Executive Director) led the deal process, with Pete Fendall (Business Development & Operations Director) overseeing the legal and financial due diligence process.
Cultural fit was as important to DSW as it was to us, and we went through the SHL psychometric testing model DSW use. We met with Liz Lawson, DSW’s Talent & Resourcing Manager, to review the results – we were a great fit, and it was good to identify our combined strengths and how the model could work effectively for the Bridgewood team.
What are the benefits of the DSW model?
Whilst we are retaining the Bridgewood trading name, being linked to the DSW brand and part of the DSW network will undoubtedly open new doors for us. DSW’s licensing model is simple and means that, as we continue to grow, there will be a fair share of revenue.
DSW’s comprehensive support infrastructure, which includes working capital funding, compliance, marketing and public relations, IT, mentorship and administration support, will really help us develop and grow the business. In particular, we are looking forward to the training and development component, which will support our team in the future.