YFM exits Naylor Industries

Carmen Reichman
28 January 2013

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YFM Equity Partners has sold UK-based manufacturer of building materials Naylor Industries back to its management, reaping a 2x money multiple on its original investment.

The original deal was made through the South Yorkshire Investment Fund, which is now focusing on the realisation of its investments. The fund's mission of investing in companies across Yorkshire and the Humber has been taken over by Finance Yorkshire.

Debt
HSBC's South Yorkshire commercial team arranged a £14m debt package as part of the transaction to support the company's international expansion following YFM's exit.

Previous investment
YFM backed Naylor in January 2008. Since then the firm has made two further investments in the company to support the development of new and existing products. Under YFM's ownership the company also internationalised, with overseas exports now accounting for 20% of the business's revenues.

Naylor's turnover increased by around 30% to £36.6m over the holding period; the company posted operating profits of £2.4m in 2012.

Company
Naylor was founded in 1890 in Cawthorne, Barnsley. The business has been under family ownership for four generations. It manufactures building materials, lintels and pipes, particularly clay sewer pipes and surface water drainage pipes.

Naylor employs 230 staff across manufacturing sites in South and West Yorkshire, the West Midlands and Fife.

People
Angela Warner is a portfolio director at YFM. The GP introduced former Sheffield Forgemasters chairman and chief executive David Fletcher as non-executive chairman of Naylor. Edward Naylor is chief executive of the company.

Advisers
Vendor – Nabarro (Legal).
Company – DLA Piper (Legal).
Debt – PwC (Financial due diligence); Irwin Mitchell, Dean Gormley (Legal).