Sale of DP Seals set to drive next phase of growth

The shareholders of DP Seals are delighted to have completed the sale of the precision seal manufacturer to Swedish conglomerate Lagercrantz, in a deal supported by PKF Francis Clark. The transaction paves the way for the company’s next phase of growth under its existing management team, whilst preserving its identity and facilitating managing director Andrew Piper’s retirement.

DP Seals is a designer and manufacturer of bespoke precision-engineered rubber seals, gaskets and mouldings for mission- and safety-critical applications. Employing over 50 staff at its Poole headquarters, it supplies a broad range of sectors including aerospace and subsea engineering. The company’s manufacturing capabilities make it a critical part of the supply chain for blue-chip customers including Eaton Aerospace, Siemens and Mercedes AMG. Its components can be found in Royal Navy and US Navy submarines, Formula 1 cars, the Boeing 787 Dreamliner and remotely-operated underwater vehicles.

Listed on the Stockholm exchange, Lagercrantz is a Swedish-based conglomerate comprising over 70 companies, primarily across Scandinavia and northern Europe but extending as far as China, India and the USA. It operates a decentralised model, allowing management teams a high degree of independence whilst providing strategic and financial support to drive growth. DP Seals is its fourth UK acquisition under its subsidiary Lagercrantz UK Ltd.

DP Seals was founded by David and Barbara Piper in 1976. Andrew succeeded his father as MD and has successfully scaled the business over the last 20 years by diversifying its customer base and the sectors in which it operates, whilst David and Barbara retain a shareholding. With Andrew approaching retirement, the family sought a buyer which would preserve their legacy whilst supporting the existing management team to take the company on the next phase of its journey.

Advised by Chris Potts, Sophie Swift and Paul Stout at PKF Francis Clark, the company was marketed in early 2023 and attracted interest from multiple UK and European engineering businesses. Following a competitive bidding process, which focussed not just on the financial deal structure but also potential buyers’ future intentions for the business, Lagercrantz was selected as the preferred purchaser.

PKF understood our concerns and priorities… They were instrumental in getting this deal over the line.

Lagercrantz UK CEO Russell Stuart said: “DP Seals is a market leader renowned for its ability to design and manufacture high quality specialised rubber seals and mouldings. We see major opportunities to develop the business, in close cooperation with the management team, by building on the company’s vast experience and technical capabilities.”

Andrew Piper, who will remain employed by DP Seals for a year from completion to ensure a thorough handover, said: “Having not been involved in selling a company before, setting out on this process was a little daunting. As a family business, both my parents and I have a huge emotional investment in the company and wanted to see it go to a good home. We needed to ensure that we as shareholders received sufficient cash to support our retirement, and were also determined to see that our staff were retained and well looked after during the transition of ownership.

“PKF understood our concerns and priorities. At the outset, they steered us on reasonable valuation expectations in the current market and gave us financial planning advice to determine if such a valuation would meet our personal needs in retirement. From there they guided us through the sale process, identifying and negotiating with suitable acquirers, supporting our team during the rigorous due diligence process, and providing tax advice in several areas.

“Their experience and expertise was evident in the professional manner that their specialist teams handled everything, but what really shone through was Chris and Sophie’s ability to help us take the emotion out of an emotive subject, providing a voice of reason to help us understand issues from all points of view and ultimately reach positions that were acceptable to both sides. They were instrumental in getting this deal over the line.

“Looking forward, it is exciting to bring DP Seals to the next level alongside a stable main owner who takes a long-term view and brings extensive industrial and international experience. I look forward to working with Lagercrantz, in partnership with our own highly skilled team, to take advantage of the growth opportunities for the company’s products in the market.”

DP Seals is a great example of the SME businesses we support every day.

Chris Potts, corporate finance director at PKF Francis Clark, added: “DP Seals is a great example of the SME businesses we support every day. The high regard in which it is held by its multinational customer base is testament to the quality of its unique products, processes and capabilities. Our firm has supported DP Seals and the Piper family for a number of years; it was important to us not just to maximise value but to find a buyer that would preserve their legacy. Whilst this sale had its challenges, they were successfully overcome by taking a proactive approach that considered the priorities of all parties, and we look forward to continuing to support the company on its next phase of growth under its existing management team and the stewardship of Lagercrantz.”

As well as the lead advisory team, Lisa Whitbread, Michelle Cordy and Callum West in PKF Francis Clark’s tax advisory team provided corporate and personal tax advice; sell-side legal advice was provided by Paul Longland, Zoe Watson and Oonagh McKinney, of Frettens Solicitors; and buy-side legal advice was provided by Richard McGlasham, of DLA Piper.

Find out more about PKF Francis Clark’s experienced team of corporate finance specialists.