Chiltern Capital backs buyout of Inciner8 from founder
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Chiltern Capital has completed a buyout of Southport-based Inciner8, a designer and manufacturer of incinerators, for an undisclosed sum.
The business manufacturers incinerators for a range of applications across the waste management industry including medical, municipal and animal, and supplies incinerators to a range of customers including corporate, government and non-governmental organisations.
It was founded in 2003 by Vince Ferguson, who will be exiting the business at completion.
Chiltern has taken a majority stake in the company and will play an active role in supporting the management team, led by Mike Melia, to build on Inciner8’s successful growth track record and develop additional revenue streams.
As part of the transaction, experienced private equity chairman, Duncan Cooper, joins the board as chairman.
David Butler, investment manager at Chiltern, said: “We are pleased to partner with Mike and the rest of the Inciner8 team and look forward to supporting the business as it capitalises on its strong market position to grow its product range, service offering and global reach.”
Managing director, Mike Melia, said: “I am delighted to be working with Chiltern as we build on our reputation as a leading supplier of incinerators globally, and continue to develop our service model and telemetry solutions.”
The deal builds on Chiltern’s track record of supporting founder succession plans, and investing in service-led industrial businesses.
A year ago, Inciner8 said it was aiming to export to all 195 countries across the world.
The manufacturer of clean air incinerators exported to more than 170 countries in 2018/19, which contributed to record-breaking sales and turnover growth of 15% to £7m – around £6.7m of this came from overseas markets.
In the previous 12 months it installed 26 medical incinerators on a group of South Pacific islands, including Fiji and Solomon, and leveraged itself as a strategic partner for the Chinese Government in the construction of 300 waste-to-energy plants.
The deal was enabled through a multimillion-pound lending facility from Manchester-based Shawbrook Bank.
David Butler said: “Speed, certainty and flexibility are three essentials we look for in any funding solution and Shawbrook expertly delivered on all three. We are investors in ambitious businesses and Shawbrook’s recognition of Inciner8’s potential made working with them the obvious choice.”
Chiltern’s acquisition was supported with a multimillion-pounds unitranche loan, including an additional revolving credit facility, provided by Shawbrook Bank.
James Salmon, director within Shawbrook’s financial sponsors team, said: “We are delighted to bring our own expertise and specialist knowledge to the table in providing funding for an ambitious sponsor and innovative UK SME.
“Chiltern are specialists in investing in growing lower mid-market companies and Inciner8 is yet another example of their ability in spotting ambitious businesses and management teams looking to grow. We are both impressed and excited by the Inciner8 business and management team and immediately identified the value that Chiltern could bring as investors.”
Shawbrook Bank’s legal advisor was Macfarlanes.
Vincent Ferguson was advised by RSM, led by corporate finance partner James Wild, with support from Rikesh Patel, Neil Patel and Ben Everson.
James Wild said: “We are delighted to have advised Vince on this successful sale, adding to our recent successes in mid-market private equity. We believe Chiltern and it’s management are strong partners for the business going forward, and it’s great to see continued M&A appetite for businesses with robust and scalable models.”
Regional law firm Napthens provided legal advice on the transaction. The team was led by head of corporate Keith Melling supported by Gareth McIntegart, David Carr and Jayne Croft from the firm’s Liverpool office.
Keith Melling said: “It’s been a pleasure to support Vince and the management team on this next step in the Inciner8 journey. Completing the sale in the current economic environment is a testament to the strength of the business and its ability to sustain continued growth.”