Down to earth and not too corporate, with a common sense and pragmatic approach.
David Tomlinson, Director - Moody Direct
Case Study summary
In October 2024, Moody Direct, a long-established supplier of solutions and services to the dairy, food & beverage, brewery, chemical, and pharmaceutical sectors, headquartered in Retford was acquired by AxFlow UK, with Shorts’ Corporate Finance team acting as lead advisers to the shareholders. David Tomlinson and Ken Wild discuss their roles and the evolution of Moody Direct.
When looking to sell, they considered several advisers, with Shorts ultimately chosen for their professionalism combined with a down to earth and common sense approach. Shorts’ taxation and management accounts teams assisted with the transition, whilst Corporate Finance lead through the intensive due diligence process. Ken and David both highlight the importance of advisers during such processes.
David and Ken emphasise how Shorts were critical to the sale’s success, describing the service as pragmatic, providing common sense guidance, and offering valuable relationship management. They strongly recommended using an adviser like Shorts for any business sale process.
Read the full conversation below
Can you please outline your background within the business as introduction
I’m David Tomlinson, and I’ve been with Moody’s for 26 years. After 7 years working in a local accountancy practice, and qualifying as a Certified Accountant, I joined Moody’s in 1998 as Company Accountant. After 5 years with the company, I became FD and in 2016 Ken and I completed the management buyout of Moody Direct from Paul Moody, Moody’s original founder. Ken and I ran the business together for just under nine years until we sold the business to AxFlow UK in October 2024.
And I’m Ken Wild. My background is in engineering. Having worked for several different businesses, I started my own company in 1998, which I sold to Moody Direct in 2007. Following the sale of my company to Moody’s, I continued to work in the business until David and I bought Moody Direct in 2016.
We are a process engineering business, primarily supporting the hygienic liquid sectors, such as dairy, food and beverage. If it’s a liquid and it goes through stainless steel, we can handle it. Within our heat transfer division, we also support industrial sectors such as oil & gas, power generation, buildings, swimming pools, and even a well known constructor in Formula One. Turning over more than £20m and with around 90 employees our services include projects, equipment maintenance, testing, and the distribution of process equipment and spare parts.
How did you come to the decision to sell?
Since the management buyout in 2016, it had been assumed that I (David) would most likely buy Ken out when he retired. However, a couple of years ago, it was getting to the point where, to allow sufficient time to plan Ken’s retirement exit, I needed to make a decision.
After much soul searching, I concluded I did not have the risk appetite to take on the level of financial commitment that would have been required. I have enjoyed having Ken as a business partner, sharing the responsibility, the ups and the downs of company ownership together and I realised I didn’t want to do it alone.
Prior to making the decision to sell the company, we’d been approached over the years by a few companies, one of which was AxFlow. We had worked with them for a long time, as a supplier to Moody Direct, so we already knew the people, the business history and had an insight into their company culture.
Describe how you chose Shorts to be your advisers
Initially we sought recommendations from people we trusted. We contacted Wake Smith, our lawyers who we have worked with for around 25 years. We also contacted our auditors and we obtained three or four names who we then approached and organised a series of meetings. Andy Ryder at Shorts was recommended to us by John Baddeley (of Wake Smith).
The sale of the business was such an important event in both of our lives, so it was vitally important to us to be comfortable and at ease with the people we would be dealing with. What set Shorts apart in those initial discussions was Andy Ryder’s personality, plain speaking and down-to-earth approach. We felt we could relate to him and most importantly we could see ourselves being able to work with him.
Can you describe the sale process?
After the initial discussions and negotiations around the deal structure, we agreed formal heads of terms with Axflow and from there we entered into the due diligence process.
The due diligence turned out to be much more prolonged and involved than we had ever envisaged it would be, despite warnings from the outset from Andy. The amount of information and detail we had to produce and disclose was enormous. You just have to dig in, grit your teeth and get on with it.
Our advice to anyone looking to sell their business in the future would be to ensure all contracts, agreements and records are in place and to hand before entering into a sale process. You do not want to be on the back foot trying to put these things in place during due diligence, whilst simultaneously trying to keep your business running.
Which other of Shorts’ services have you used?
Axflow didn’t wish to acquire the business premises and, as the premises were owned by the Moody Direct group, we undertook a statutory demerger to extract them from the group. Shorts taxation team advised on the demerger. This has worked out very well as, together with our wives, we have retained ownership of the premises through a new separate company, and Moody Direct continues to lease and occupy the premises.
Shorts were also heavily involved with the post-acquisition transition. AxFlow had utilised their own advisers from the due diligence perspective, and we were with Shorts. Whilst we had always produced monthly management accounts, they weren’t produced quickly enough or in the format required to upload and submit to the Axflow Group in Sweden. So they brought in Alexa and Pete from your management accounts team (Genus) to help and assist with the transition. Previously, we used to prepare management accounts four or five weeks after the month end, and since the sale they’re now prepared within three working days!
In April AxFlow recruited a new financial controller into Moody Direct, but Alexa and Pete provided invaluable support during the transition period following the sale. It was good from our perspective, as sellers, that Axflow decided to appoint Shorts, our advisers, to support us during the transition process. It worked well.
What would you say was the best part about working with Shorts?
We believe that without Shorts the deal might possibly not have gone through.
As Ken and I were to continue working in the business, post-sale, it was important that our relationships with the Axflow management team were maintained. Having Shorts as our mouthpiece during the sale process, was an important buffer during what were, at times, difficult negotiations.
It was also managing expectations. I may have thought something was a waste of time, but being able to speak to Shorts and say, “am I wasting my time here?”, or “do I need to do it?”, or “can we tell them we’re not doing that?” Simply having that voice of reason was reassuring.
The role Shorts played in managing those relationships and expectations, and being able to stand back on our behalf, because we’re in the thick of it, was so important. We still had the business to run at the same time as we were going through the due diligence process and Shorts supported us, during stressful times, both on a professional and emotional level. Looking back there were also some occasions where we needed to be told our expectations were unreasonable, and Shorts were able to do that. Without that pragmatic approach, we might not have got the deal over the line.”
Looking back now, months after the sale, what are your thoughts?
It’s only afterwards that you reflect and think about what we’ve done and achieved. It’s life changing. What the future holds, or could hold, looks completely different to what it would’ve done if I had bought Ken out. I look back now and think, how did we do it? It was the same when the management buyout went through in 2016; for a while you reflect and think – how did that happen? How did we achieve that?
I would recommend anybody thinking of going through this process to use a professional adviser. Whilst there is a not insignificant cost to consider, they are a vital support in guiding and advising business owners through the sale process.
My advice to any business owner thinking of selling, whether you already know of a potential buyer or not, is you need an adviser.
Three phrases to describe Shorts?
Commitment
Pragmatic
Common sense approach
About Moody Direct
Moody Direct are leading suppliers of process and packaging solutions to the dairy, food, beverage, brewery, ice cream, chemical and pharmaceutical industries with a large customer base in the UK, Ireland and around the world.
With a customer base ranging from small farmer producers to blue chip multi-national companies Moody Direct provide a tailored service to all their customers with the purpose of reducing operating costs, increasing production and sustaining efficiency.
