Clearwater advises on MBO of Stockport-based Micro Librarian Systems


Micro Librarian Systems (MLS), the UK’s leading designer, supplier and retailer of high-specification library automation and management systems for schools and colleges, looks set to capitalise on its market leading position through a Management Buy-Out (MBO), which sees Andrew O’Brien and Stephen Phillips taking over the reins.

Based in Stockport, Cheshire, Micro Librarian Systems provides a simple but innovative automation package for libraries and has gone from strength to strength since it was established in 1981.

Advising the MBO team were the Manchester office of Clearwater Corporate Finance.

The company, which currently employs 10 and has plans to recruit, has expanded rapidly in terms of users and staff and has become one of the foremost-established designers of library automation systems with the needs of educational establishments in mind. It has an increasingly international customer base, which includes over 5,000 users.

The MBO team; Andrew O’Brien and Stephen Phillips are being joined by finance director Deborah Jones who was previously chief finance officer at European Colour plc. Richard Beaton joins as chairman.

Funding for the MBO is being provided by Montagu Capital and HSBC Bank in Manchester.

Andrew O’Brien commented: “This is a tremendous opportunity to take the business forward. Significant growth will come from our low risk, organic strategy of increasing penetration into existing markets and increasing the revenue stream from our existing customers. Further growth opportunities also exist to sell products under licence in English-speaking countries worldwide.”

Only 15 per cent of primary schools have an automated library management system at present. Of these, around 90 per cent have already chosen MLS as their preferred supplier.

The two main packages offered by MLS are Eclipse, a high-end solution aimed at High Schools, Colleges and Universities and Junior Librarian, a purpose-built system aimed at Infant and Primary Schools. These systems are designed not only to manage the library stock but also provide retrospective cataloguing functions and act as a teaching tool to cover many aspects of the National Curriculum.

MLS’s products have received recognition from Ofsted for their ability to encourage pupils to visit the library and make good use of the facilities on offer. Furthermore, Eclipse 2 and Junior Librarian have been registered and approved to be purchased by Electronic Learning Credits (eLC’s) – specific government funding for ICT that supports the National Curriculum.

Carl Houghton, partner with Clearwater who led the deal with assistant director Jane Mercer, commented: “MLS dominates its market by combining leading-edge technology such as fingerprint recognition with simple design that can quite literally be used by a five-year old.”

There are over 30,000 schools in the UK, 26,000 primary schools, including infant, junior and preparatory and 5,000 secondary schools.

This deal sees Montagu Capital make their second investment from the HSBC Growth Capital Fund, since the re-branding of the business from the former HSBC Private Equity.

Tim Smallbone, director with Montagu Capital commented: “This is an extremely attractive business with a strong management team and considerable growth potential. As the UK’s proven market leader, the company provides excellent, child friendly products with a high educational and interactive content. We are delighted to be a part of its development.”

Working with Tim Smallbone of Montagu Capital were Andy Leach and Mahmoud Atalla.

The HSBC team was led by Stuart Gray with Craig Hopwood and Mark Greenwood.

Brabners Chaffe Street (Mark Brandwood and Ruth Jones) provided legal advice to the MBO team. Hammonds (Stephen Levy and Gregg Davison) provided legal advice to Montagu Capital. KPMG Transaction Services (John Hughes) and Burlington Consultants (Martin Bean) led the financial and commercial due diligence exercises respectively.