MBO takes manufacturer out of FTSE 250 group

A £22.5m management buyout has spun-out manufacturer Precision Micro from Meggitt, six years after joining the FTSE 250 group.

Private equity firm LDC has invested £13m in the deal, which was led by Precision Micro’s managing director Ian McMurray.

The photo-chemical etching company generates annual sales of £15m from its sites in Erdington, Germany and the Netherlands.

It manufactures more than 50m high-precision metal components each year for major global manufacturing customers, with around 75% of its sales coming from overseas.

The investment will be used to exploit market trends it sees in the increasing preference for complex, burr and stress-free components manufactured from high-performance metals, rising quality standards, the miniaturisation of electronics and increasing demand for clean and fuel-efficient vehicles.

McMurray said: “We see enormous opportunity across our markets as equipment manufacturers look for ever-more cost-effective, reliable, safe and high-performing components.

“Securing the backing of an experienced and supportive partner like LDC means we can invest further in the business, leveraging our unrivalled technical expertise and processing capabilities to further support our customers around the world with increasingly sophisticated requirements.

“This is an exciting time for our team as we invest in our future growth.”

With roots dating back to the early 1900s when it was founded as a division of engravers V Siviter Smith, Precision Micro was established in Birmingham in 1962 and was acquired by Meggitt in 2012.

Today it worked to micron accuracy supplying components to global manufacturers including Rolls-Royce, Mercedes, Jaguar and Bentley.

Chris Handy, investment director at LDC, said: “Our investment is all about helping Ian and his team unlock the business’ potential by facilitating further investment in its processing capabilities, manufacturing capacity and new product introduction, helping it stay ahead of its market.”

Dave Johnson, who has held senior roles at Lucas, BTR and Dunlop Aerospace, will join the business as non-executive chairman while Handy will also join the board, as non-executive director.

Banking facilities were provided by HSBC. LDC was advised by Gateley PLC, BDO and Springboard Corporate Finance. Management was advised by Freeths and Cattaneo LLP.