Howorth Airtech Ltd (United Kingdom) - Oct 2007

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01 October 2007

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Barclays Ventures has backed the buy-in management buyout (BIMBO) of medical service provider Howorth Airtech Ltd from its private vendor. The total funding package for the acquisition and development of the business going forward was £12.5m. Royal Bank of Scotland provided a senior debt and working capital package to support Barclays Ventures investment which sees it own a 35% stake in the newco. BDO Stoy Hayward had been marketing the business for a year to significant trade interest. Barclays Ventures was introduced to the incoming CEO Andrew Steel and was one of a number of private equity houses courting him. Barclays Ventures cited its strong knowledge of the business and its willingness to support its expansion abroad as key to it winning the deal. From exclusivity, the deal took nine months to complete.

Company

Bolton-based Howorth was founded more than 40 years ago. It designs, manufactures and installs ultra clean air systems and ancillary products for medical operating theatres. It currently has an installed base estimated to be more than 2,000 units in the UK, Europe, US and the Far East. Barclays Ventures believes Howorth is well positioned for growth as its products create clean air systems for hospital procedures and due to the increasing emphasis on reducing infection rates and the adverse publicity surrounding MRSA, it is anticipated that Howorth’s ‘Exflow’ system is well positioned to gain further market penetration in the international marketplace. In the pharmaceutical market, Howorth designs, manufactures and installs isolation systems, separating operatives from hazardous chemicals and drugs. Scientific advances and higher potencies of compounds means there is an increasing importance placed on such equipment by all the major global pharmaceutical companies. Barclays Ventures expects Howorth to grow from increasing demand combined with increasing the company’s international sales and marketing capabilities. Howorth employs nearly 100 staff and generates profits of £1.6m on a turnover of £21.6m.

People

Andy Lees led the deal for Barclays Ventures. Andrew Steel is leading the BIMBO. He previously led the successful management buyout of Altair Filter Technology, backed by Gresham, before it was sold to GE Energy in 2006. Steel is joined by Peter Lewis, previously sales director of Altair and nonexecutive chairman Bob Spender. Tony Dean, Phil Mason and Chris Thomas worked for Royal Bank of Scotland on the transaction.

Advisers

Debt - Addleshaw Goddard, Amanda Gray (Legal)Equity - CIL , Tom Ellson (Commercial Due Diligence)Equity - Dow Schofield Watts, Andy Dodd, Dave Graham, Mark Watts (Corporate Finance)Equity - Grant Thornton, Richard Williams, Anthony Booth (Financial Due Diligence)Equity - Hammonds, Giles Chesher, Gregg Davison (Legal)Management - Pinsent Masons, Mark Harris, Eleanor Tinnelly, Stephen Levy (Legal)Vendor - BDO Stoy Hayward, Gordon Lane, John Hunt, Kieran Lawton (Corporate Finance)Vendor - BDO Stoy Hayward, Amanda Gray (Legal)Vendor - Berg & Co Manchester, (Legal)