News & Analysis

BPE exits UK welding company

The UK mid-market specialist has made four times its money on its investment in Fosbel via a secondary disposal to American Capital Strategies.

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Barclays Private Equity (BPE), the UK mid-market buyout firm, has exited its investment in UK welding company Fosbel through a £57 million (€83 million; $101 million) secondary buyout.
 
The buyer was the Bethesda, Maryland-headquartered listed buyout and mezzanine firm American Capital Strategies. The flexible finance supplier will also provide a revolving credit facility and is investing in the senior term debt, senior and junior subordinated debt and equity.
 
BPE says it received a return of more than four times its investment over a two-year period.
 
Fosbel provides ceramic welding maintenance and repair services to coke oven and glass furnace operators. Its customers include steelmakers, glass producers and oil companies in Europe, Asia, South Africa and the Americas. It employs 350 people in its headquarters in Birmingham, England and its offices in Cologne, Germany and Cleveland, Ohio.

It was a relatively small company but the management had developed it into a market leader

Phil Griesback, managing director, BPE

BPE backed a £20 million MBO of the company from metals company Foseco International Ltd and Glaverbel Group, the European subsidiary of Asahi Glass in Japan, in July 2003.

Phil Griesback, managing director, BPE

“We were very impressed with its market position,” Phil Griesbach, a managing director of BPE in Birmingham, told PEO. “It was a relatively small company but the management has developed it into a market leader.”
 
Since the firm’s acquisition, Fosbel’s turnover has increased from £23 million in 2002 to £48 million this year. Griesbach said that the company has benefited from a growing appetite for both steel and coke in the world economy.
 
He added that this trend has been driven by organic economic growth and the preparations for the 2008 Olympics in China, noting that the company’s Chinese and Asia Pacific divisions have recently seen significant expansion.
 
American Capital Strategies is a publicly traded buyout and mezzanine fund with capital resources of approximately $5.4 billion. In April the firm established a Paris-headquartered affiliate known as European Capital Financial Services.
 
European Capital is headed by Jean Eichenlaub and will invest between €5 million and €125 million of equity, mezzanine and senior debt to fund growth, acquisitions and recapitalisations across the continent.
 
Last month the firm hired Nathalie Faure Beaulieu from Mezzanine Management to set up a London office.