Endless exit wins deal of the month

Turnaround investor Endless' exit from Willenhall-headquartered Acenta Steel has scooped Insider's Deal of the Month for March.

The buyout by the management team of the steel processor provided the firm with a return of about six times its original investment.

Chief executive Tarlok Singh and chief financial office Colin Mills led the deal, with support from long-term funding partner GE Commercial Finance.

Midlands Business Insider editor Kurt Jacobs said: "While exits from management buyouts are not unusual in the current climate, the wholesale purchase of a business by its management team is – the default option is usually a trade sale to a big corporate.

"For a management team to get the funding for this sort of deal in the current climate is a heck of an achievement.

"Two other issues also stand out. Firstly is the size of the return that Endless achieved in a very short time – six times investment in two years is a cracking result, and one that many investment houses would be delighted to achieve over a far longer period.

"Secondly is that the deal was heavily supported by GE, which shows the increasing role of asset-based lending not only in working capital but in funding acquisitions."

Endless acquired the stake in Acenta from its former US owners in January 2011.

Acenta Steel, which can trace its origins back to the 19th century, has a turnover of £82m across its six sites in the UK, including in Dudley, Willenhall and Rugby. The business employs 343 staff.

Endles partner Darren Forshaw said at the time: "Our investment in Acenta Steel just over two years ago took place when its US owners viewed the business as non-core and the company faced some difficult challenges due to the volatility in worldwide steel demand.

"We recognised the long-term prospects for the business and also the strength of its market position and its people. Tarlok and Colin have led the business through an unprecedented period of success and it is now in a great position to achieve long term sustainable growth."

The Endless investment was led by Forshaw, James Woolley, Indra Valeinis and Kerry Swain. Endless was advised by Eversheds and the MBO team were advised by Gambit Corporate Finance, DWF and PwC.

Funding for the transaction was provided by GE Commercial Finance, with legal support from Squires Sanders.