The private equity funded £22.5m management buy-out (MBO) of Precision Micro Limited, Europe’s market-leading photo-chemical etching company, from global aerospace, defence and energy group, Meggitt PLC. LDC, the mid-market private equity investor, invested £13m of equity supporting the management team and debt funding was provided by HSBC. Precision Micro, operating from its state-of-the-art processing plant in Erdington, Birmingham, manufactures more than 50 million high-precision metal components each year for major global manufacturing customers across multiple markets. Working to micron accuracy, its components enable next-generation aircraft engines, zero-emission vehicle technology, surgical instruments, titanium implants, a wide range of consumer electronics, safety-critical vehicle ABS braking systems and premium interior trim for brands including Rolls-Royce, Mercedes, Jaguar and Bentley.
We guided the management team through the intricacies of the MBO process. This included modelling proposed funding structures to assess the relative equity returns and considering how they compared to market norms and reviewing the forecasts and proposed financial covenants to check for a reasonable level of headroom. We advised management on the negotiations with the private equity funders, including on the terms and quantum of their investment, acting as a buffer as and when necessary on the negotiations along with providing them with a sounding board throughout the process. Our role also involved us working closely with the management team’s legal and tax advisers.
WHAT OUR CLIENT SAID:
“This is an exciting time for our team as we invest in our future growth. Cattaneo came recommended to us and right from the start we felt that the chemistry between us worked well. Cattaneo’s experience and knowledge in private equity and MBOs showed – this was key for us having not previously been involved in such a deal. Cattaneo provided us with straightforward advice, offering options and ideas, while guiding us where appropriate. We are very grateful for the clear thinking and tireless support that has helped us complete the transaction.”
Mick Taylor, Commercial Director, Precision Micro