Endless backs Sewtec Automation MBO

Alice Tchernookova
15 August 2017

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Leeds-based private equity house Endless has backed the management buyout of automated manufacturing and packaging systems business Sewtec Automation.

The buyout, which sees Endless become majority owner, was led by Sewtec's management team.

The main vendor in the deal was identified as Bernard John Meehan, who was previously a director and will stay on as consultant. According to publicly available information, Meehan held 40% of Sewtec's share capital prior to the buyout, while other members of the Meehan family held a further 50%. Other management team members held the remainder.

Meehan said he picked Endless over a number of other potential backers. The GP acted as sole external investor in the deal, with no debt providers involved, a source familiar with the matter told unquote".

Endless is currently investing from Endless Fund IV, which closed on £525m in 2014. The vehicle seeks to acquire mid-market businesses with a turnover within the £10-500m range, investing equity tickets of £10-80m.

Sewtec is the 11th acquisition completed by Endless this year and the fourth management buyout. The GP said it aimed to include more traditional management buyouts in Fund IV's investment strategy, adding that 2017 could mark a record year for the firm, both in terms of new investments and exits.

Sewtec will now focus on investing in research and development, and attracting, training and retaining specialist engineers.

Company
Launched in its current form in 1982, Sewtec was originally the design and development department of sewing machines manufacturer Singer Corporation. The business currently focuses on automated manufacturing and packaging systems for a customer base operating in the confectionery, food, pharmaceutical, personal care and tobacco sectors.

Based in Dewsbury, West Yorkshire, Sewtec's machinery ranges from simple conveyor systems to fully automated and robotic machines. With a 70-strong team, the company currently generates £22m in revenues, with exports accounting for 85% of its sales.

People
Endless – Andrew Ross (director); Darren Forshaw (founding partner).

Advisers
Equity – Squire Patton Boggs (legal); KPMG (tax).
Vendor – Mazars Corporate Finance (corporate finance); Gordons (legal).