Engineering firm secondary buyout is Deal of the Month

THE transaction which saw Warwickshire-based manufacturer The Engineering Technology Group undergo a secondary buyout has been chosen as our Deal of the Month for June.

It was a deal advised locally and funded by Santander Corporate Banking.

The Engineering Technology Group supplies machining centres and fixtures and provides engineering services to manufacturers in the automotive, aerospace, and other specialist industrial sectors. 

Turnover has increased by more than 200% over the last three years to reach £30m, with the group supporting major investment programmes in the supply chains of companies such as Jaguar Land Rover and Airbus.
 
Employing 120 people, the firm’s headquarters are in Southam with a recently opened operations centre in Wellesbourne and a manufacturing facility in Coventry. 

The deal sees sales director Martin Doyle acquire a majority shareholding in the business and step up to become group managing director. 

The former managing director, John Temple, who led the group’s first buy-out in 2012, becomes executive chairman and retains a large shareholding. 

Paul Rhodes, who founded The Engineering Technology Group in 1996, has sold his stake and retires from the business.
 
Temple said, “Martin and I have worked closely together over the last few years to develop the business. This transaction and the new ownership structure is part of the succession plan that will secure the company’s future and ensure continued growth.”
 
The deal was funded by Santander Corporate Banking, Birmingham, including finance from the bank’s specialist Growth Capital Fund arranged by James Cooksey and Steve Mitchell.
 
Simon Chapman of Burgis & Bullock Corporate Finance was lead advisor to The Engineering Technology Group and structured the transaction.  Rick Smyth of The Wilkes Partnership in Birmingham advised the company and John Temple on the deal.
 
Stephen McElhone of Spearing Waite (Leicester) and Will Lodder of Magma Accountants (Rugby) advised Martin Doyle. Santander’s legal adviser was Emma Hopkinson of Browne Jacobson (Birmingham) and financial due diligence was undertaken by PricewaterhouseCoopers, Birmingham. 

Commercial due diligence was carried out by Armstrong Transaction Services and management due diligence was completed by The Quinn Partnership.
 
The financial terms of the transaction were not being disclosed.

Explaining the Deal of the Month choice, TheBusinessDesk.com editor Andy Coyne said: “This deal ticks a lot of boxes.

“It solves a succession planning issue of the type that many businesses face and allows the founder to exit the company which now gains new momentum from a re-shaped management team.

“Businesses supplying demanding and fast growing businesses such as Jaguar Land Rover need to be certain that they have got their management structure right as the decision-making process will be crucial to their future success.

“The deal also brought together a wealth of locally-based advisers who were able to bring the transaction to fruition in a professional and timely manner.

“MBOs and secondary MBOs of this kind are essential if we want to introduce new business leaders into the economy and hopefully we will see more of them in the coming months.”

View all of the month’s deals here.

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