A West Midlands-based manufacturer and supplier of fuel and emissions components has been bought by its management after they secured the backing of a structured finance provider.
A West Midlands-based manufacturer and supplier of fuel and emissions components has been bought by its management after they secured the backing of a structured finance provider.
Fuel Parts UK is now under the control of new managing director Andrew West after his team raised an undisclosed multi-million pound funding package.
GE Commercial Finance, the business-to-business finance unit of General Electric, provided the funding needed to complete the deal.
Bromsgrove-based Fuel Parts was sold by Paul Tomlinson, who established the business more than 20 years ago.
GE’s funding comprised a confidential invoice discounting agreement and revolving line against stock, which gave Fuel Parts the flexible funding it required. The deal will also provide working capital to enable management to expand and grow the company.
West said his team has a clear vision for the future of the business. “As one of the leading providers of automotive parts, there is considerable business potential to continue expanding – particularly with developments in fuel injection engines – and we hope to build on this opportunity.
“We chose GE ahead of other finance providers because of their proven track record of funding MBOs, which ensured our transition went smoothly both during and post-MBO,” he added. “Their professionalism and approach was head and shoulders above the others.”
Guy Walsh, regional director, GE Commercial Finance, Business Finance, said: “Fuel Parts UK is an established company with great leadership from Andy West and a highly technical and qualified workforce. We are delighted to have provided the funding for this transaction and look forward to seeing the business grow in the future.”
The buy-out team was advised by Dudley-based law firm Hawkins Hatton, which was led by partner Colin Rodrigues. The firm’s team included associate Harminder Sandhu and employment specialist Sarah Pugh.
As well as supporting negotiations with the main shareholders, Hawkins Hatton advised on due diligence and tax matters.
“The new owners of Fuel Parts UK have got some big plans for the business and for taking it to the next level,” Rodrigues said. “We were delighted to act for the management team and bring about a successful MBO which will enable the company to continue to inject new leadership and identify areas of growth and opportunity.”
The vendor received advice on the tax and corporate finance aspects of the deal by Ormerod Rutter Chartered Accountants, led by tax partner Peter Orton.
The firm advised on all aspects of the tax warranties and indemnities, assisting the legal team through to completion.
Orton said he was introduced to the deal following an outside recommendation. “All specialist services have been provided by Ormerod Rutter Chartered Accountants; which specialise in tax and corporate finance deals to include international tax planning for non-resident individuals and companies.
“Fuel Parts under the new management team should prosper in its future trading environment,” he added.
Fuel Parts manufactures and supplies fuel and emissions components. It specialises in distributing engine management electrical parts for sophisticated vehicle engines and providing catalytic converters.
GE Commercial Finance specialises in lending, leasing and financing services. It has operations in 35 countries with assets of more than US$215 billion (£106 billion).
Its Business Finance division was established 40 years ago as an independent structured finance provider for SMEs and provides a range of businesses with financing to support their day-to-day activities as well as major initiatives such as MBOs, MBIs, corporate restructurings, acquisitions, plant investment and development into new markets.
Its funding options are based on a combination of debtors, finished stock, plant and machinery, unencumbered land and buildings, historic and projected cash flow and even the value of a brand.
