AAC sells Dunlop Aircraft Tyres to Liberty Hall in $135m deal

Under the vendor's decade-long tenure, Dunlop has undertaken an international expansion strategy, in addition to developing new products. The business will continue to follow the same strategy under its new ownership structure in addition to pursuing potential bolt-on acquisitions.

According to unquote" sister publication Debtwire, a number of trade buyers and US-based private equity sponsors were involved in the sales process, which began around September 2016.

The sales process was conducted based on EBITDA of around £12m, according to Debtwire, a figure that is understood to have been heavily adjusted for items such as planned future expansion in the US market.

Following the deal, the existing management team led by CEO and managing director Gordon Roper will remain in place.

The transaction is Liberty Hall's fourth platform investment and its second in Birmingham, with the GP having acquired aerospace components manufacturer Bromford Industries from Darwin Private Equity in March 2016.

Debt
A consortium consisting of Royal Bank of Scotland, Permira Credit Solutions and Macquarie Group provided a debt package to support the deal.

Previous funding
AAC (Then known as ABN Amro Capital) backed the management buyout of Dunlop from its private shareholders in 2007, in a deal understood to value the company at around the £40m mark. AAC held a 74.6% stake in Dunlop following the deal, with management owning the balance.

Company
Founded in 1910 and headquartered in Birmingham, Dunlop designs, manufactures and retreads tyres for use in the aerospace, defense and aviation industries. The company has a headcount of 570 across three production facilities in Birmingham, UK; Mocksville, North Carolina; and Jinjiang, China. Its products are sold to 300 customers across 85 countries, with 90% of its revenues generated from aftermarket sales.

Dunlop generated a turnover of £47.3m in 2015, according to publicly available documents, with operating profits of £6.7m.

People
Liberty Hall Capital Partners – Rowan Taylor (founding partner).
Dunlop Aircraft Tyres – Gordon Roper (CEO, managing director).

Advisers
Equity – Macquarie Capital (corporate finance); Gibson Dunn & Crutcher (legal).
Vendor – Rothschild (corporate finance); CMS Cameron McKenna Nabarro Olswang (legal).
Management – Macfarlanes (legal).

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• Topics
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• UK / Ireland
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• Secondary buyout