BGF sells Molecular Products Group to Arlington

Kenny Wastell
06 January 2017

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Business Growth Fund (BGF) has sold its stake in Molecular Products Group (MPG), a UK manufacturer of breathable gas generators, to US private equity firm Arlington Capital Partners after a two-year holding period.

Financial details of the deal remain undisclosed, though the business has increased its operating profits from £1.2m to £2m between the financial years ending March 2014 and March 2016, according to publicly available figures. Furthermore, the business currently generates 93% of its revenues from non-UK sales and therefore could benefit from the recent devaluation in sterling following the UK's vote to leave the EU.

As part of the deal, MPG's US president, Troy Rhudy, will assume the leadership of the group, with CEO Ian McKernan and general manager Andrew McKernan stepping down. According to publicly available records, Arlington managing partner Peter Manos and vice-president Christopher Neil Stallmann will take a seat on the MPG board.

Since BGF's initial investment two years ago, MPG has undertaken an international expansion strategy, opening new manufacturing facilities in both the UK and US, as well as increasing its distribution capabilities in China, Australia and India. The GP also introduced Paul Barnard, former president of Fluids Platform and managing director of Rocol, as non-executive chairperson at the company.

MPG generated a turnover of £22.7m in the financial year ending March 2016, according to publicly available records, up from £20m at the time of BGF's initial investment.

Previous funding
BGF provided MPG with £4m of expansion capital in September 2014 in order to fund international expansion.

Company
Founded in 1973, and headquartered in Harlow, MPG is a developer and manufacturer of oxygen, gas filtration and anaesthesia devices primarily used in the healthcare, military, diving and industrial sectors.

The company has an additional office in Boulder, Colorado, and distribution offices in Australia, China and India.

US sales account for approximately 46% of MPG's turnover, according to publicly available records, with Europe – including the UK – accounting for 23%.

People
Arlington Capital Partners – Peter Manos (managing partner); Christopher Neil Stallmann (vice-president).
Business Growth Fund – Will Gresty (investor).
Molecular Products Group – Troy Rhudy (CEO).

Advisers
Vendor – Mills & Reeve, Anthony McGurk (legal).