Naylor looks to grow exports following MBO
HISTORIC family-run building materials manufacturer Naylor Industries has been sold to its management.
The deal sees South Yorkshire Investment Fund, through its fund manager YFM Equity Partners, double its money on its original £1.25m investment.
As part of the deal, HSBC is providing Naylor with new finance facilities.
The original investment in Naylor Industries, which is based in Cawthorne, South Yorkshire, and manufactures building materials, pipes and lintels, was made in 2008.
Since then SYIF has made two further investments in the company to support operational improvements and new product developments.
YFM Equity Partners also introduced former Sheffield Forgemasters chairman and chief executive David Fletcher as non-executive chairman of Naylor Industries.
Naylor was founded in 1890 and present chief executive Edward Naylor is the fourth generation of the family to head up the business.
The company employs 230 staff across manufacturing sites in South and West Yorkshire, the West Midlands and Fife. In the year to February 2012 it had a 14% increase in turnover to £36.6m with operating profits of £2.4m.
HSBC’s South Yorkshire Commercial team has provided a comprehensive finance package to support the firm’s growth in a deal headed by international commercial manager Lee Bloodworth.
The £14m finance package, which includes invoice and equipment finance, has been structured to support Naylor’s international growth plans, with the company looking to expand its export proposition.
Angela Warner, portfolio director at YFM Equity Partners said: “We have worked closely with Edward and David to help the company develop new products and internationalise its offering.
It has achieved good success in these areas against a tough economic climate. It is a strong manufacturing business that can develop new products that the market demands. We wish the team continued success in the years ahead.”
Mr Naylor said: “YFM Equity Partners have been very supportive investors for our business. They understand the challenges that manufacturing businesses face and by following up initial investment with additional financial support, they have allowed us to maintain a continuous programme of investment in business operations and development of new products.
“Going forward, we see fantastic prospects for our products in overseas markets and will be seeking to maintain the recent dramatic growth in export sales. We have a great history of making quality British products and the team looks forward to continuing the development and growth of our business.”
Lee Bloodworth, HSBC international commercial manager, said: “Naylor has recognised the potential of the export market to its business and as a leading international bank, HSBC is an ideal partner to help the business achieve its targets.”
Advisers from Leeds and Sheffield worked on the deal. Legal advice was provided to SYIF by Nabarro and to Naylor by DLA Piper. PwC provided due diligence advice to HSBC. Dean Gormley, Partner and Northern Head of Banking & Finance at law firm Irwin Mitchell, advised HSBC.
A majority of Naylor’s turnover relates to pipes; the company manufactures clay sewer pipes and plastic ducting and surface water drainage pipes. The company’s other activities include a concrete lintel business and most recently a flowerpot business which trades under the name The Yorkshire Flowerpot Company.
Builders’ merchants are the main UK customers for Naylor’s products. The export market continues to grow with almost 20% of current turnover from such markets as Australasia, Sout East Asia and Middle East markets.
