Mobeus backs Arc Specialist Engineering MBO

Mobeus deployed equity via its first institutional fund, with RBS supplying an invoice finance facility. Mobeus is currently investing from its maiden institutional fund, Mobeus Equity Partners IV, which held its latest closing in May 2017 on £140m. The GP – which has historically focused on the management of VCT funds – launched the new vehicle early in 2016 with a hard-cap of £150m. The move came shortly after UK regulatory changes were introduced limiting the types of deals permissible to VCT funds.

The deal is the largest of the four investments completed by the fund to date, according to the GP. Prior to that, Mobeus notably invested £8m in the management buyout of UK-based asset management business Ludlow Wealth Management Group at the end of June.

According to a source close to the situation, a final close for the fund is imminent. This will in turn kickstart the five-year investment period for the vehicle, although it is already deployed at almost 25%.

The Arc transaction was introduced to Mobeus by Ray Harris of Odyssey Corporate Finance, acting on behalf of the company's management team. The limited process, initiated by management, saw Mobeus compete against LDC, unquote" understands.

The GP sees potential to keep growing the group by bolting on further small, family-owned engineering firms in the Midlands.

Company
Arc was founded in 2013 to invest in specialist engineering businesses. The group notably produces non-stick coated steel for the bakeware industry through its Cooper Coated Coil division. It also supplies rolled steel products for the windows industry through its EWS division.

According to publicly available information, Arc posted a £46m turnover in 2016 with EBITDA of £4m.

People
Mobeus Equity Partners – Richard Babington (partner); Freddie Bacon (investment manager); Dominic Draysey (investment executive).

Advisers
Equity – Gowling WLG, Andy Stylianou, Ragi Singh, Neil Hendron, Navin Prabhakar (legal); Mazars, Julian Clough, Adam Foster (financial due diligence); CIL Management Consultants, Jon Whiteman, Laurence Ludgate (commercial due diligence), Cadence Advisory, Karl Holmes, John Weedon (debt advisory); BDO, Alistair Kirkbright (commercial due diligence); Highwire Consulting, Annie Gray, Sandra Aldridge (management due diligence).
Management – Odyssey Corporate Finance, Ray Harris (corporate finance); Higgs & Sons, John Heaton, Jody Webb (legal).

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