Gio Benedetti, the Italian-Scots entrepreneur, has sold his revolutionary cling film and dispenser business for £21m to a management buy-out team that includes himself.
Gio Benedetti, the Italian-Scots entrepreneur, has sold his revolutionary cling film and dispenser business for £21m to a management buy-out team that includes himself.
"It's a very unusual move," said Benedetti, 64, whose daughter Nicola has been taking the musical world by storm with her violin performances.
"But it means that we now have £21m to invest in the wider business. I'm part of the management team myself, so I suppose not a lot has changed."
However, he will also use a large chunk of the new cash to pay down debts at Benedetti International, the parent company of his Wrap Film Systems firm and Wallace Cameron, the maker of the colourful, compact and practical first-aid kits.
Under the terms of the MBO, which is backed by Close Brothers Growth Capital, management of Wrap will retain a majority equity stake in the business.
Barclays Scottish Leveraged Finance has also committed £8m of debt facilities to the deal.
The deal comes just months after Benedetti struck a multi-million pound deal with supermarket giant J Sainsbury to supply 350 stores with his unique cling film and foil dispenser.
However, Benedetti International also had £14.4m of bank loans and overdrafts at the end of 2005.
The MBO is led by managing director Adrian Brown, who has been one of the main driving forces in the business.
Since joining in 1999, Brown has helped increase the turnover from less than £5m to its estimated 2007 figure of £27m, and has been instrumental in the winning of accounts.
The Sainsbury agreement marked the fifth such deal with a major retailer, adding to deals with Tesco, Wm Morrison, Somerfield and Lakeland, which stock the dispensers - each marked with the slogan "A disposable dispenser that really works!"
Established in 1975, Wrap is one of the largest film and foil converters in Europe, and the Italian-born entrepreneur, who came to Scotland 50 years ago, said turnover in 2006 had climbed 16% to £22m, with pre-tax profits up 48% to £1.9m, and he forecast similar growth in this financial year.
Wrap, which is based in Telford, Shropshire, and employs approximately 150 staff, was acquired in 1995 by Benedetti International.
Benedetti yesterday said that the Wishaw, Lanarkshire-based 10-person design team, which originally came up with the dispenser idea, was not part of sale, but would now be contracted by the new owners.
"The design team is the heart of what we do, and will continue to innovate and come up with new products," he said. "That will not be sold. We are currently working on a number of new designs, including a carrier bag problem."
Benedetti's dispenser, like most good ideas, is deceptively simple - except, of course, that it took £6m and three years to design and build the product - and the machinery that makes it - from scratch.
As well as cutting down on waste, its simple press-down action eliminates the wounds suffered in the busy catering industry and in household kitchens by tearing off sheets from conventional dispensers.
The company recently launched its first television advertisement, showing a housewife struggling with a traditional cling film dispenser before discovering the benefits of the Benedetti product.
