Major buyout at historic glass firm
MANUFACTURING firm Allied Glass has completed a £75m management buyout.
The West Yorkshire-based company makes glass bottles, containers and products for markets including beer, food, spirits and wine and has an extensive client list.
The secondary buyout has been backed by Barclays Private Equity and was led by operations director Alan Henderson, who will become managing director following the deal.
Mr Henderson said: “BPE’s investment will provide us with the ability to further build on our established customer base and continue to develop our design offering.
“It will also facilitate further advancement in flexible production techniques and allow us to build additional production capacity as demand increases. We will also be able to take advantage of acquisition opportunities as they arise.”
The company has sites in Leeds and Knottingley employing more than 600 people and has annual turnover of almost £80m.
Allied Glass underwent a buyout in 2002, led by Andrew Spencer, when the company was bought from its parent, Associated British Foods, by Close Brothers Private Equity (CBPE).
Mr Spencer is to become executive chairman of the group following the latest deal.
Barclays Private Equity has invested £29.5m for a majority stake in the company, alongside a reinvestment from management and senior debt facilities, provided by HSBC Corporate Banking and Leveraged Finance and Lloyds TSB.
Steve O’Hare, director at Barclays Private Equity in the North, who joins Allied’s board as a non-executive director, said: “Allied has amassed a strong stable of world-renowned customers, invested in flexible production facilities which complement its high value, low volume niche, and developed capabilities in the production of light weight containers.
“Taking into account its customers’ focus on building brand value through design, the company has successfully grown to become the fourth largest manufacturer of glass containers in the UK.
“The business has invested heavily in its asset base, providing a strong platform for future growth. Allied can now service increasing volumes, and has developed new products targeting niche markets.”
Martin Lunt, HSBC’s head of the corporate banking in Yorkshire, said: “Allied Glass is a landmark Yorkshire business that has grown to become a recognised leader in its field.
“This exciting deal will allow the company to take full advantage of additional growth opportunities stemming from an existing high quality client base coupled with the development of new relationships.
“Allied Glass represents a prime example of a strong business that has thrived throughout the recent challenging economic climate through strong management and a high value product offering, and this new partnership will help the company go from strength to strength.”
Leeds-based Park Place Corporate Finance, led by partners David Hardless and James Stones, acted as lead advisors, supported by Ben Peacock in structuring the transaction, and raising debt and equity funding.
Mr Hardless said: “Allied is an exceptional business with an experienced management team. The company has performed strongly during the period since CBPE’s investment and I am confident that this will continue during its new partnership with BPE.”
Pinsent Masons (Peter Wood) and Rothschilds (Stephen Moore) advised BPE.
Eversheds advised CBPE and the other selling shareholders.
Ernst & Young provided financial and commercial due diligence. PwC and Grant Thornton provided tax advice to Newco and management respectively. HSBC and Lloyds TSB were advised by DLA Piper.
Both of the group’s factories can trace their histories back to the end of the 19th century. Lax and Shaw was founded by Thomas Lax and John Shaw in the Hunslet district of Leeds in 1891, while the first record of Hope Glass Works in Knottingley, home to Gregg and Company, dates back to 1874.
Today, these two operations make up the UK’s fourth largest glass container producer, with a specialisation in the spirits business.
Customers include Whyte & Mackay, William Grant & Sons, and Princes Foods. Brands its glass products are used in include Johnnie Walker whisky, Bombay Gin, and Smirnoff vodka.
Its two factories, which produce 13m products every week, have a number of furnaces.
