Investor swoops for specialist manufacturer

Credit: Chamberlin

Castings and engineering group Chamberlin has sold its specialist industrial manufacturing subsidiary in a £3m deal, as it looks to focus on its foundry and machining operations.

Project Apollo, part of investment firm Longacre Group, has bought Petrel, which operates across the world in the oil and gas, marine and defence sectors.

Petrel’s 35 employees based in Kitts Green, Birmingham, will be retained by the new owners and will add to its 700 employees across Europe, US and Asia.

The acquisition will provide Walsall-based Chamberlin with “an exciting new chapter” to invest in the development of steel production at Russell Ductile Castings and spheroidal graphite iron production at Chamberlin and Hill Castings.

Proceeds from the deal are expected to reduce the group’s liabilities by £2.6m and contribute a profit of no less than £2m in 2024. £600,000 will be paid to HSBC to reduce Chamberlin’s debt and release certain charges over the shares and assets of Petrel.

Revenue at the group has marginally increased by £100k to £10.6m in H1 2024 in comparison to the previous year. Chamberlin has also reported an underlying operating profit of £100k (H1 2023: £100k loss). The deal comes after £1.16m was raised in share placings to support its growth strategy and strengthen its balance sheet.

Keith Butler-Wheelhouse, Chairman, commented: “Performance in the first half has been broadly in line with the Board’s expectations. The sale of Petrel will provide the Group with the financial resources and balance sheet strength that it needs to focus on its core iron foundry and machining operations and for both businesses to pursue their respective strategies with greater impetus.”

“This exciting transaction will enable the Group to grow and develop its core business operations from a stronger financial footing.

“We believe that Longacre Group are the ideal new owner for the business and are well positioned to support Petrel and the ongoing development of its strategy.”

Longacre’s turnover has reached £170m across manufacturing, business services, specialist chemicals and healthcare. The investor says it’s looking to grow through majority acquisitions with access to £100m equity capital in Western Europe.

The scheme’s deficit has been reduced from £5.5m in March 2019 to £400k following completion of the deal, with the deficit recovery plan reduced from 13 years to 4 years.