Loss-making tooling firm to be sold for £221.5m

STRUGGLING Cheshire tooling company Brammer is set be sold for £221.5m to Al Robin Ltd, trading as Bidco, a subsidiary of US private equity firm Advent International Corporation.

The Knutsford-headquartered company, which warned last month it would not make pre-tax profit in the its full year, announced it has reached agreement on the terms of a recommended all cash offer for the entire ordinary share capital of Brammer by Bidco.

The company said the recent strategic review of Brammer’s business initiated by its board had confirmed a number of key strengths of the Brammer Group but also identified a number of material operational issues and the key actions needed to address these issues.

A statement said: “The board of Brammer has considered that addressing the operational issues to deliver a turnaround of the business as a listed company would be complex, require significant structural and behavioural changes, incur significant cash reorganisation costs and take at least three years to implement and would, therefore, carry significant execution risk and uncertainty for a public company.
 
“The board also recognises the financial and commercial value of the partnership with Advent given its operational expertise and significant experience in the distribution and power manufacturing sectors.
 

“In addition, Advent’s significant equity investment will greatly reduce the Company’s debt burden, thereby improving Brammer’s operational flexibility.”

Advent International is a large and experienced global private equity investor.

The firm has invested in more than 315 private equity transactions in 40 countries and, as of  June 30 2016, had $40 bn in assets under management.

It has a long and successful track record of investing in both the distribution and power manufacturing sectors.

Brammer chairman Bill Whiteley said: “The board has evaluated the offer in the context of the strategic, operational and financial issues highlighted by the business review and the nature, extent and timescale of the actions needed to address these issues.

“Accordingly, the board is unanimously recommending the offer which represents an opportunity for Brammer shareholders to realise value for their investment in cash at an attractive premium to the current share price.

“Advent is a leading global private equity firm, and its proposal provides a high degree of certainty for Brammer’s shareholders, employees and customers.”

Managing partner of Advent Jan Janshen said: “We have admired Brammer’s business for some time and are delighted to have the opportunity to partner with Brammer to further strengthen its leading position in the European industrial MRO distribution market.

“Advent’s deep sector expertise and our operational focus will help Brammer to execute a turnaround strategy and strengthen its commitment to its customers and suppliers.”

Meanwhile, Brammer has announced that non-executive director Charles Irving-Swift has been appointed as the chief executive of O&S Doors Ltd with immediate effect.

As a result of this appointment, Irving-Swift will be stepping down from the board of Brammer on December 31.