Better Capital reaps 7x on £326m Gardner sale to SLMR

The transaction followed a seven month exclusivity period and generated net proceeds of £254.1m for the GP, representing a 7x money multiple and an IRR of 35.3%. The price is 13.5x the company's 2015/16 EBITDA.

The sale price also represents an increase on the £300m figure the GP was originally seeking when it appointed Lazard to oversee the sales process in February 2016, according to Sky News.

Throughout the course of its holding period, Better Capital invested additional funds in order to support the company's acquisitive growth strategy and capital projects. A year after the GP's initial investment, the business acquired the brands and certain assets of Blade Tooling and Blade Technology from administrators KPMG.

According to Better Capital's most recent financial results, Gardner accounted for 69% of its 2009 Fund's NAV. In November 2016, when Better Capital entered into exclusivity with SLMR over the deal, the GP said in a statement the sale would result in the fund increasing its NAV by 9.65 pence per share.

Other realisations from the 2009-vintage vehicle include the £47m sale of health and safety management business Santia to Inflexion-backed Alcumus in December 2015, and the sale of software provider MentecPlus Integrated Solutions to listed firm Unit4 Business Software Holding in February 2012. The Santia sale represented a 2.8x money multiple and a 26% IRR.

The sale of Gardner comes a year after Silverfleet Capital acquired Sigma Components, another UK provider of aerospace components, from parent group Avingtrans in a £65m management buyout.

Previous funding
Gardner first came under private equity ownership in March 2003, when ABN Amro Capital and Dunedin Capital Partners co-led a £21.5m buyout of the company from the receiver of parent business L Gardner Group.

Five years later, in October 2008, The Carlyle Group acquired the company from ABN and Dunedin for an undisclosed sum.

Gardner became Better Capital's maiden investment just 14 months later, with the GP acquiring the business from Carlyle in a £20m deal in February 2010. At the time, unquote" reported the firm had invested £15m in Gardner to pay down its debt and fund future growth. Better Capital then invested a further £21m in the company throughout the course of its tenure, bringing its total investment in the group to £41m.

Company
Headquartered in Derby, Gardner is an aerospace components supplier. It manufactures machined and fabricated detailed parts made from soft and hard metals for customers including Rolls Royce, Airbus, Triumph Group, Spirit Aerosystems and Chromalloy.

Gardner generated a turnover of £132m in the year ending August 2016, with EBITDA of £24m, according to a statement. It has a total headcount of more than 1,500 and operates from 10 manufacturing facilities across the UK, France, Poland and India.

People
Better Capital – Richard Crowder (chairperson); Rob Asplin (managing director).

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