Business Growth Fund has backed VTL Group, a manufacturer of precision-engineered components for the automotive industry. This is BGF’s 10th investment in the manufacturing sector and its first in the automotive industry.
Business Growth Fund (BGF), the independent company established to help Britain’s growing businesses, today announced its investment in VTL Group, a manufacturer of precision-engineered components for the automotive industry.
BGF has invested £4m of growth capital in the company and will take a minority stake and a seat on VTL’s existing board.
This is BGF’s 10th investment in the manufacturing sector and its first in the automotive industry.
VTL is a leading UK developer and manufacturer of precision engineered transmission and turbo components for the commercial vehicle and passenger car markets. VTL supplies these components to major automotive manufacturers including Cummins, Toyota, Renault and Nissan and also provides a variety of additional services including product R&D and prototyping.
Formed in 2001, VTL has developed from a single product, single site European focused business, to a global operation, manufacturing multiple products and employing over 400 people generating annual revenues in excess of £50m.
VTL is headquartered in Huddersfield, where it also has four manufacturing facilities and an R&D centre. In addition VTL has a manufacturing facility in Charleston, USA, a manufacturing facility in Dharwad, India and a sales and technical presence in Yokohama, Japan. VTL serves customers across Europe, North America, India and Asia.
VTL is one of the largest precision contract manufacturing businesses operating in the UK within its specific niche areas of turbo and transmission components and serves a large and growing international marketplace. The core end users of commercial vehicles and passenger cars are growth markets globally and VTL is extremely well positioned to capitalise on this with its technical expertise and world-class facilities.
BGF’s investment will enable VTL to grow the business organically by developing new customers in the automotive sector and increasing the range of components it manufactures for existing customers. The current funding package and access to further growth capital will also provide the financial means to pursue other acquisitions and investments in the future.
Alongside its equity investment, BGF has contributed additional support to the company through the introduction of Michael Baunton as Non-Executive Chairman. Michael has an extensive background in the automotive sector and joins VTL from the Society of Motor Manufacturers and Traders (SMMT) where he was Interim Chief Executive. Prior to this, his roles included President and MD at Tenneco, President at Perkins Engines and Vice President at Caterpillar. He is also currently on the board of TT electronics plc and ACAL Energy. Michael was awarded a CBE in 2004 for services to the automotive and engineering industries in the UK.
Richard Taylor, BGF, commented:
“BGF has invested in a number of exciting manufacturing businesses to date and it is fantastic to be able to welcome VTL into this group. Employing over 300 skilled staff in the UK alone, VTL is a prime example of a Yorkshire manufacturing firm with its heart in the UK and operations across the globe.
“VTL is managed by a high calibre team that has created a business of scale and carved out a leading position in its niche markets. There is significant scope for growth both organically and with the opportunity to acquire complementary businesses which management have demonstrated that they can integrate quickly and efficiently. Michael’s appointment is a significant endorsement of VTL and its prospects and his wealth of contacts and sector experience will no doubt prove invaluable to the business. HSBC have also been instrumental in the company’s development to date and were keen to introduce us to VTL to help continue this growth.
“As a technically differentiated business offering unique products to a large and growing international market, I believe VTL has a great future and I look forward to working with Bruno and the rest of the team.”
Bruno Jouan, Chief Executive Officer of VTL, commented:
“Engineering firms such as VTL have the power to drive the UK economy for many years to come provided that we continue to invest appropriately in R&D, new products and highly skilled people. This is precisely what we have been doing at VTL for the past twelve years and with help from BGF, will continue to do but at an accelerated rate. From the outset, BGF demonstrated an interest in our business above and beyond that of a typical investor and having spent time talking to them over the past few months, we feel confident that they are the right fit for us.
“We see a number of exciting ways to grow the business organically and acquisitively both here in the UK and overseas. Our partnership with BGF and continued support from HSBC will enable us take advantage of the significant growth opportunities in the automotive component manufacturing and development markets.”
Michael Baunton, Non-Executive Chairman of VTL, commented:
“I am delighted to be joining the board of VTL at such an exciting time in its development. Its growth opportunities have been given a significant boost with BGF’s investment and the company and its management team have impressed me with what they achieved to date. I hope to be able to add significant value to VTL through my contacts and experience in the automotive industry.”
Advisers to the transaction:
Squire Sanders (Legal advice led by partner Richard Hunt in Leeds)
Addleshaw Goddard (Legal advice)
Sentio Corporate Finance (Financial due diligence)
Smith & Williamson (Tax due diligence)
PHOTOS AVAILABLE FROM EQUITY DYNAMICS
Emily Weston, Equity Dynamics – 07825 326 442
Notes to editors:
About Business Growth Fund:
Business Growth Fund has been established to help Britain’s growing businesses. Growth potential is the key criteria. BGF will invest between £2m and £10m per business in return for a minority equity stake and a seat on the board for a BGF director. BGF will provide long-term equity investment for those growing companies that today do not have access to this source of capital. As such BGF hopes to be a catalyst for growth among smaller UK companies.
BGF is an independent company with capital of up to £2.5 billion, backed by five of the UK’s main banking groups – Barclays, HSBC, Lloyds, RBS, and Standard Chartered. BGF is managed completely autonomously with an independent management team.
Key facts and figures:
• 90 people at 7 offices across six UK regions
• Over £170 million of growth capital invested in 34 companies from 17 sectors
• 5,300+ people currently employed by BGF backed companies
• More than money for investee businesses, for example BGF has placed 25 highly experienced non-executive chairman and non-executives.