MBO and £2m fundraise completed at university spin out

An engineering company is poised for growth following a management buyout from the University of Sheffield.

The deal has concluded alongside fundraising to take the company to its next phase of expansion.

Castings Technology International (CTI) is a Rotherham-based provider of manufacturing, technology, expertise and services to the cast metals sector and global supply chain.

It has completed a £2m fundraising, backed by Mercia Asset Management, via the Northern Powerhouse Investment Fund and Nucleus Commercial Finance, and at the same time has been spun off into the ownership of its management team.

A University of Sheffield spokesman said: “We are delighted this transaction will see the continuation of CTI’s operations under new ownership, securing the ongoing employment of 60 people locally in highly skilled jobs within the Sheffield City Region.

“Progressing to private ownership is a natural and welcome evolution, and the university has worked with the CTI management team to ensure as smooth a transition as possible.”

CTI boasts casting capabilities in almost any type of metal alloy and has a 1,200 kg titanium vacuum melting capability, ranking it as one of the largest in the world.

CTI is casting complex components supplied to the aerospace, defence, chemical nuclear and marine markets.

The funds raised will allow the company to grow more rapidly by investment into further product development, alongside sales and marketing infrastructure and resource.

Richard Cook, managing director, a highly experienced engineer, and local entrepreneur Kevin Parkin, chairman, lead the management team.

Yorkshire-based deal making firm, Castle Square Corporate Finance, led by managing director Kevan Shaw and director Steve Bell, provided advice on the transaction and ran the fundraising process.

Parkin said: “This is a unique opportunity to develop and grow this highly efficient manufacturing capability now that the equipment, processes and quality systems have been fully developed and accredited.

“Working alongside our AMRC neighbours, together with the superb research and development initiatives provided by the university, will give CTI an enviable position in the global supply chain.”

Cook added: “The operational management team of CTI intrinsically understand this business and are dedicated to continuing to serve our customers and to working with our fantastic team of experienced engineers.

“The management team would like to place on record its sincere thanks to the University of Sheffield for its support and assistance during the transferral of the ownership of the company and its support for CTI over a number of years.”

Shaw said: “It was exciting to be involved in a transaction and fundraising that will see CTI embark on rapid growth, exploiting its market leading technology and world-class production facilities whilst creating highly skilled jobs, for the benefit of the Sheffield City region.”

Legal advice was provided to the management team by Sheffield lawyers, Wake Smith, led by John Baddeley, with Mark Cooper of accountancy firm BHP providing tax advice.

Wake Smith chairman John Baddeley, who led the Wake Smith team which included commercial property director Paul Gibbon, said: “We are delighted to have helped the MBO team which is providing expertise and products to a global supply chain and flying the flag for the region’s advanced manufacturing expertise.

“I am sure they will build the business and expand their reach over the next few years.”

The Northern Powerhouse Investment Fund has provided a significant loan to CTI to support its growth plan, with Andy Tyas and Pete Sorsby from the team at Mercia Asset Management leading on the transaction on behalf of the fund, with working capital facilities provided by Financial Institution, Nucleus Commercial Finance, led by director Riana Azam.

Tyas said: “CTI is a great example of the quality of the SME cohort situated in the Advanced Manufacturing Park and wider Sheffield City Region community.

“The expansion of its capability across a wide and high-quality customer base is an exciting prospect we look forward to supporting in the years to come.”

Dan Renton and his Corporate Finance team at Deloitte provided corporate finance advice to the University of Sheffield, and Roger Gough of DLA led the legal team acting on the University’s behalf.

Nucleus Commercial Finance were advised by lawyers at Gateley. BHP will become the company’s new auditor.

Join us at the 2022 Rainmaker Awards