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Leumi ABL supports MBO of Midlands automotive castings manufacturer - Contech Operating UK Limited
In a deal completed at the end of May 2009 Leumi ABL has supported the management buy-out of an automotive castings business with a funding line to bolster working capital headroom.
Management have purchased Contech Operating UK Limited, a £12m turnover manufacturer of high precision aluminium castings from its US parent. Founded in 2001, Contech produce a range of products including steering rack housings, power take off housings and knuckles. Their products end up in major European car marques including Jaguar Land Rover, Ford, Mercedes Benz, Fiat and Renault. Contech employs over 90 people at its purpose built facility in Welshpool and is widely regarded as one of the best foundries in Europe.
Mike Yiannis of Birmingham-based professionals Odyssey Corporate Finance advised on the deal: “This was a challenging deal due to the torrid market conditions and lack of funding available for any business, let alone one in the automotive sector. Contech has an exceptional management team, is profitable and cash generative with a strong balance sheet and healthy order book. Despite all these positives, just about every bank and VC we approached turned it down due to the high profile problems of the sector. Leumi ABL, however, could see the opportunity beyond the headlines and responded quickly, taking a long term and pragmatic approach to the deal. A CID facility was provided and we are all delighted with the outcome.”
Jason Holland, Midlands Regional Sales Director at Leumi ABL commented: “Contech is well placed to build on their world class facilities and strong customer relationships. They have significant competitive strengths and are economically resilient and robust despite the recession. Having secured several new contracts they are also embarking on further investment in their operations and we look forward to supporting their continued growth.”
In a deal completed at the end of May 2009 Leumi ABL has supported the management buy-out of an automotive castings business with a funding line to bolster working capital headroom.
Management have purchased Contech Operating UK Limited, a £12m turnover manufacturer of high precision aluminium castings from its US parent. Founded in 2001, Contech produce a range of products including steering rack housings, power take off housings and knuckles. Their products end up in major European car marques including Jaguar Land Rover, Ford, Mercedes Benz, Fiat and Renault. Contech employs over 90 people at its purpose built facility in Welshpool and is widely regarded as one of the best foundries in Europe.
Mike Yiannis of Birmingham-based professionals Odyssey Corporate Finance advised on the deal: “This was a challenging deal due to the torrid market conditions and lack of funding available for any business, let alone one in the automotive sector. Contech has an exceptional management team, is profitable and cash generative with a strong balance sheet and healthy order book. Despite all these positives, just about every bank and VC we approached turned it down due to the high profile problems of the sector. Leumi ABL, however, could see the opportunity beyond the headlines and responded quickly, taking a long term and pragmatic approach to the deal. A CID facility was provided and we are all delighted with the outcome.”
Jason Holland, Midlands Regional Sales Director at Leumi ABL commented: “Contech is well placed to build on their world class facilities and strong customer relationships. They have significant competitive strengths and are economically resilient and robust despite the recession. Having secured several new contracts they are also embarking on further investment in their operations and we look forward to supporting their continued growth.”
