TowerBrook buys Volution off AAC Capital

Greg Gille
19 January 2012

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TowerBrook Capital Partners has acquired UK-based ventilation products specialist Volution Group from AAC Capital - a deal reported to be worth around ТЃ160m.

AAC bought the business in 2006, a deal valued at £160m; it reaped a 2.4x money multiple on its original £49.25m investment.

TowerBrook had been in contact with Volution's management prior to an initial auction process being launched last year - however TowerBrook didn't participate in the process, which ultimately didn't result in a sale. The GP instead made a separate offer for the business after the unsuccessful auction and secured exclusivity on the deal.

TowerBrook believes that the upcoming tightening of building regulations across Europe will drive growth for the ventilation products provider.

Debt
Although information on leverage remains confidential, its is believed that an £80m all-senior package was provided by Bank of Ireland, GE Capital and Royal Bank of Scotland.

Previous funding
AAC Capital (then ABN AMRO Capital) acquired Volution from Montagu in 2006 for £160m. Debt was provided by the Royal Bank of Scotland and included senior, second lien and mezzanine elements. AAC took a 69.6% stake in the company, with management holding the balance.

Since then, AAC recruited a new CEO, helped Volution expand its energy-efficient product range, brought manufacturing back to the UK from overseas, and drove "significant" growth in EBITDA margin. Volution also sold the Cable Management business and acquired Manrose Manufacturing in 2007.

Company
Volution has operations that date back to the 1930s, but in its current shape was formed in 2002 by the buyout of two divisions, Vent-Axia and Cable Management Products, from Smiths Group Plc. The Crawley-based business supplies a range of ventilation and heat recovery products, with an emphasis on energy efficient solutions.

The group posted a £95.1m turnover in the year ending in July 2011.

People
Patrick Smulders led the deal for TowerBrook. Paul Southwell and Andrew Moye led the exit on behalf of AAC, and as a result of the sale will resign from Volution's board.

Advisers
Equity – Weil Gotshal & Manges (Legal); Ernst & Young (Financial due diligence); Lansdowne Capital (M&A); Lincoln International (M&A).
Vendor – CMS Cameron McKenna (Legal); DC Advisory Partners (M&A).
Company – BDO Stoy Hayward (M&A); Stevens-Bolton (Legal).