Case Study

Mornington Partners Limited (Mornington Partners) (http://www.morningtonpartners.com/) strategic investment in Hague Dental Supplies Limited (Hague Dental) (https://www.haguedental.com/)

Founded by Jim Hague in 1996, Hague Dental is a dental equipment company that specialise in project management, design and planning of dental surgeries. They offer their clients a team of engineers and technical sales staff whose knowledge of dental equipment and the industry is second to none.  Now a multi-award-winning company, Hague Dental have grown to become one of the UK’s leading independent dental equipment companies.

Several years before completing the investment deal with Mornington Partners, the Shareholders of Hague Dental received a speculative email from one of the “large national / international brokers”. The email was timely as the Shareholders had been contemplating their exit strategy and they proceeded to instruct the broker to sell Hague Dental.

Despite promises made by the broker, the service offered was not that which was promised and deteriorated leaving the Shareholders feeling “like a number” once they had signed up. After six months the brokers generated just one offer at 25% of the valuation, they had initial placed on Hague Dental. The Shareholders reached the conclusion that Hague Dental was not an attractive proposition and certainly not worth what they had been led to believe.

A few weeks after giving up hope of a sale, the Shareholders spotted an article by Leith M&A in a regional business magazine and contacted our offices. Managing Director, David Nelson, met with the Shareholders to discuss the strategic options available to the Shareholders and their aspirations. He recalls of the meeting:

“It was clear that the Shareholders had reached a natural crossroads in the lifecycle of the business. Having started from scratch, they had reached the point at which the business had real potential to grow quickly, and I recall feeling that they needed to back themselves as they certainly had the skills and energy needed to push on.”

The advice to the Shareholders was to keep building the business for a year or so, but a year or so turned into three years and the business grew from strength to strength. The Shareholders contacted our offices again in December 2019 and it was quickly evident that they had reached another crossroads in the lifecycle of the business.

It is quite common for SME founders to reach a point (or several points) in the development of a company where they feel overwhelmed. This is usually due to a combination of factors including excessive workload / too little time off, an absence of senior management to support them and a feeling that the business is outgrowing their capabilities. This is feeling is usually preceded by rapid growth and can lead to concern that the founders do not have the requisite skills to manage the company into the next phase of development. This feeling has been likened to an ‘imposter syndrome’.

It is crucial that SME founders recognise this feeling and act to find a solution. Allowing a company to grow exponentially, without the shoring up its foundations is a dangerous strategy, as is holding the reigns too tightly and by failing to act a founder can risk losing everything, they have worked so hard to build.

There are a number of available solutions to this issue and our team are able to tailor a strategy based on the aspirations of the Shareholders. In some cases, this is an outright sale, allowing the founders to exit the business with their equity and leaving the acquiror to lead the business through its next stage of development. In other cases, founders look for the backing of an investor partner to support them through the next phase of growth.

In this case, it was evident that the founding shareholders still had a strong desire to realise the full potential of Hague Dental and continue to lead the business, but also to realise a proportion of their equity in the company and de-risk. The Shareholders decided that the time was right to look for an equity investor that could also bring hands-on management support in order to maximise the potential for growth.

The Shareholders instructed Leith M&A to conduct a detailed search of potential equity investors, to prepare a confidential teaser and a confidential information memorandum and in late February 2020 having completed the groundwork, the process of actively marketing the opportunity kicked off – just in time for the pandemic!

Our Clients braced themselves for a disappointing response but, the response was extremely positive, despite the macroeconomic environment. We were able to arrange multiple virtual meetings with potentially interested parties. Jim Hague commented:

“The quality of every single investor far exceeded the best from last time – over time I personally built a picture of what it was I was looking for in an investor/ partner. You gave me all the facts along the way, so I could make an informed decision, and make the right choices for my company and family. You encouraged me in waiting for the right business partners despite being paid on commission.

Over the next eight pandemic months we received over half a dozen decent offers, just about all were at our target and your patience never waned in explaining the ins and outs in layman’s terms to me. Coincidentally, the offers were at just over double what I had been built up to hope for a few years back!”

Exact details of the transaction value will remain undisclosed, but we are able to confirm that Mornington Partners have acquired a majority stake in the company with the existing shareholders retaining a minority stake. The investment completed on 26th February 2021.

Mornington Partners have forged a reputation for supporting exceptional growth across its portfolio companies. This ambition is perfectly aligned with the interests of Hague Dental and the partnership will focus on the implementation of growth strategies to realise the full potential of the Company, whilst maintaining its market leading service levels and technical expertise.

Jim Hague & Kirsty Hague, Founders of Hague Dental commented,

“Now we have some very hands-on partners, who are well experienced and full of new ideas and enthusiasm – at last we are free to fully focus on looking after our clients and develop our team, as well as see our company reach its potential in expansion – it’s all so much more enjoyable now we can share the load of running the business – great match, thank you!”

Joshua Segal, Co-founder of Mornington Partners commented,

“We are delighted to have completed the deal with Hague Dental. From the outset it was clear that Jim and Kirsty had built a great business with a culture of being best in class. We look forward to working together to continue the growth and success of the business. David Nelson was a huge help throughout, going above and beyond for his clients and helping us all get the deal over the line.” 

Leith M&A acted as exclusive advisors to the shareholders of Hague Dental providing a complete “wrap-around” M&A service including sale preparation, deal research and marketing, deal management, negotiation, due diligence support and transaction management services.

David Nelson, Managing Director at Leith M&A added,

“It has been a privilege to represent the Shareholders, Jim & Kirsty Hague, throughout this transaction and I look forward to watching Hague Dental go from strength to strength in the coming years.

I am full of admiration for what Jim and Kirsty have achieved since founding Hague Dental, they should be immensely proud of the company and culture they have built. Hague Dental has an outstanding reputation in the market and has already demonstrated its potential through year-on-year growth over so many years.

I have no doubt that Mornington Partners will provide the support and guidance needed to unlock the full potential of Hague Dental and deliver significant growth whilst retaining the winning culture that contributed to the company being awarded ‘Outstanding Business of the Year – 2020’ at the recent Dental Industry Awards.”

What challenges arose? How did you navigate them?

David Nelson comments:

As is the case with many transactions, this was a journey with numerous twists and turns along the way. We were fortunate enough to build a real understanding of the business and the Shareholders (Jim & Kirsty) aspirations over a number of years.

At the time of our first meeting, it was clear that Hague Dental had massive potential but, that it was not yet ready for sale. It was even more evident that the Shareholders had the desire, ambition and work ethic needed to achieve even more than they had to that point. In the years that followed to 2019, Jim and Kirsty developed the business into a multi award winning company with an outstanding reputation and substantially grew the business.

The decision to look for an investor partner in early 2020 was the right call for Jim and Kirsty and for the business. They had achieved so much to that point however, there was an underlying feeling that they and the business still had tremendous potential to achieve much more with the support of an experienced team of investors behind them.

The process of finding the right investor was also interesting not least because of the timing. The global covid pandemic was a major challenge to navigate for the dental industry and also for the M&A industry. Investors were understandably hesitant to commit capital and the dental industry was closed for business for many months. Adjusting to social distancing and remote meetings was a challenge but one we were able to navigate with video calling and virtual data room technology.

It also became apparent that as Hague Dental had grown, it had outgrown is finance function. Leith supported the Shareholders and recruitment partners to appoint an experienced Finance Director who brought much needed skills to the business and supported the due diligence process. The input of the Finance Director was invaluable to the Shareholders and the investment process.

Due to Leith’s business model – working with a smaller number of clients enabling us to give a full, holistic service – we are able to react quickly and flexibly to our Client’s individual needs. In this case the recruitment of an experienced FD enabled the Directors to concentrate their time with on-going operational issues and ultimately close the deal with minimal stress and upheaval to the running of the Company.

If you would like to talk to us, please give us a call.

If you decide you are ready to market your company and believe our approach is the right one for you we then we would love to hear from you.
Call us on

01306 646 890

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ABOUT US
Leith Mergers & Acquisitions is a family-run business based in Dorking, Surrey. We work with only a handful of clients at any given time, allowing us to provide a personal, proactive and intensive service. We pride ourselves on our ability to deeply understand your needs and motivations in order to secure the future you are aiming for.

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