Discovery swoops on remnants of Novelis in £3m acquisition

THE jobs of more than 100 workers at a Shropshire aluminium packaging firm have been saved after the £3m sale of the business to a new company.

Novelis announced before Christmas that it would be closing its Bridgnorth foil rolling and laminating plant by the end of April unless a buyer could be found. The decision threatened the jobs of 319 staff.

It has now sold the printed confectionery foil packaging operation and assets to Discovery Foils with immediate effect. The deal saves the jobs of 105 workers, although the remaining 214 people will be made redundant.

Discovery Foils financed the acquisition with support from invoice and asset based lender, Venture Finance. David Kaplan of Nelsons solicitors advised the team at Discovery and provided the introduction to Venture Finance, which was itself advised by Philip Jones at Keystone Law.  

The deal consisted of a comprehensive funding package approaching £3m, which included invoice discounting, plant and machinery and cashflow term loans.

The Birmingham office of law firm Cobbetts advised Novelis on the sale. The team comprised corporate director Nick Dawson, real estate director Julie Newell and commercial director Nigel Gardner.

Birmingham-based corporate partner, Mark Gibson, who led the team for Cobbetts, said: “Multi-colour printing is not a core activity for Novelis, but it represents a good strategic fit for Discovery Foils.
 
“By selling on the business as opposed to simply closing it, Novelis has safeguarded over 100 jobs. Despite the complex structure of the deal, we successfully concluded the transaction within a very tight timeframe.”

Teresa Geraghty, business development manager for the Midlands at Venture Finance, said: “We wasted no time in quickly getting to grips with Discovery Foils’ funding requirements. Our broad range of services meant we were able to offer the headroom needed for the deal to take place and provide ongoing working capital to promote future growth.”

Steve Westwood, managing director of Discovery Foils, is the former plant manager at Novelis.

He said: “We are delighted that a viable, sustainable solution for the confectionary business at Bridgnorth has been found, and that over 100 jobs have been safeguarded as a result. Much of the groundwork for this was carried out during the consultation process following Novelis’ proposals to cease all operations at Bridgnorth.”

The Bridgnorth business produces multi-coloured printed foil used as packaging for confectionary products for a number of international blue chip organisations. The operation is considered a strong strategic fit for Discovery Foils and the transfer of assets offers synergies with its other print and packaging interests

Under a separate agreement, Novelis will continue to supply foil to the operation.

Novelis plans to consolidate most of the Bridgnorth foil rolling and laminating operations into its other European operations. It said the move would improve the competitiveness of the company’s European foil and packaging operation in response to competition in low-cost countries.