Industrial entrepreneur on why manufacturing businesses are still good investments

Amin Amiri, the boss of Manchester venture capitalist firm A2E Industries, is staying focused on the industrial sector as the firm marks two decades in business.

Iranian-born businessman Amiri founded A2E in 2001 after working in the corporate environment with companies including Deloitte and Grant Thornton.

Amiri holds interests in a string of companies, mainly in manufacturing, through Manchester-based A2E, which has gone onto acquire controlling stakes in more than 40 mid-market companies and achieving a number of exits.

Looking ahead, the industrial entrepreneur remains focused in the region’s strong manufacturing sector, although innovation especially in the health sector is an area that he expects to grow in the near future.

Speaking to the BusinessDesk.com ahead of this year’s Rainmakers Awards, which A2E is a sponsor, Amiri said: “Over the past 20 years we have bought 48 businesses.

“We couldn’t save six of them but for the rest we have been able to invest, turnaround and grow.

“We’ve sold 12 businesses successfully and in that time, we have gradually evolved into buying businesses in specific industrial sectors that we had developed a keen expertise including aerospace, logistics, education, industrial training and apprenticeships as well as medical equipment.

“As we move forward out of the pandemic and into next year, we want to increase the footprint of the aerospace division within the EU with plans to buy companies in Germany, Spain and Italy.

“While travel has been disrupted for now due to the pandemic, the people who manufacture planes are still working. There is a backlog of 13,000 aircrafts to be built over the next 10 years so there is still huge demand in this area.”

He added: “The pandemic has shown that industrial manufacturing is still going strong because people still need goods, we still need manufacturing, and it’s a sector that has proved to be strong and resilient.”

Tech and AI is also an area Amiri sees strong growth in – if the tech involved can make a real difference he pointed out.

Last year A2E also teamed up with the University of Liverpool to form a new spin out company,  Robotiz3d – to take forward new technology that has the potential to radically transform road maintenance.

Robotiz3d is a joint venture spin out company established in partnership with A2e and will receive investment from the University’s Enterprise Investment Fund, alongside private equity investment from A2E Ltd.

Robotiz3d is developing the world’s first autonomous robot to patrol the streets in search of potholes with the ability to identify existing potholes and repair cracks before they have a chance to develop.

Amiri believes the technology is a ‘gamechanger.’

“At the moment we rely on drivers to inform the authorities about potholes and then it’s going to take some time to fix the problem.

“This clever technology not only identifies the pothole but can deposit the material needed to fix the problem before moving on.

“It’s instant, it saves time and money and improves our roads.

“This is a true innovation that can help the UK save public money and we’re very excited about its potential.”

Commenting on how A2E compares to private equity firms in the region, Amiri said the biggest differentiator is that PE firms expect to buy a business that is well managed with strong cash flow and highly competitive – but A2E tends to do the opposite.

“We buy businesses in competition with a lot of people, and we pay less, and they still sell  to us,” he said.

“What we have found in manufacturing companies is that the founder has already built a good business and then they reach a point where they are frightened to take the risk because they’re worried about losing the business.

“They don’t really know what to do. And in those situations, we come in, we pay them for what the business is worth now, and we fix their problems. If the core product is strong then we can solve all the other issues. That’s been our strategy from the start and it’s a strategy that works in good times and in bad.”