Formaplex (United Kingdom) - Jan 2008

unquote
01 January 2008

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Dunedin has invested £9m to facilitate the management buyout of specialist engineering business Formaplex. Dunedin’s £9m investment was comprised of equity and loan notes. The enterprise value of the business was not disclosed. There was no debt involved on the deal which saw the founder managers reduce their stake. Dunedin will own a 48% fully diluted stake in the company. The transaction was originated off-market after one of the company’s auditors recommended Dunedin as an investment partner to Formaplex’s management. Dunedin was attracted to the business because it is unique in that it offers a very fast turnaround time to its clients. Additionally, it has demonstrated growth of nearly 40% per annum since inception.

Company

Havant-based Formaplex provides a rapid turnaround service to engineering and product development customers including all UK-based Formula 1 teams. Formaplex utilises hi-speed CNC machining technology and describes itself as an emergency service for the engineering industry. It has developed a real niche in servicing Formula 1 teams with composite patterns and parts for wind tunnel testing, but also serves the more mainstream automotive, white goods, aerospace, marine, telecoms and medical sectors. Formaplex operates within the new product design and development industry, designing and manufacturing prototype tooling, injection moulded parts, patterns and components in very short lead times. It also works in under-bonnet development, with many of today’s car engine components already being plastic. From air and cooling systems to actual engine parts, plastic helps to make engine systems both easier to design, easier to assemble and lighter in weight. Plastic versatility has revolutionised car engine and component design. The current and anticipated environmental legislation to cut emissions will lead to the further development of plastic technology in particular with hybrid engines. The business was co-founded by in July 2001, it employs 40 people and has a forecast turnover of £8m with forecast profits in excess of £3m.

People

Giles Derry led the deal for Dunedin. Nicol Fraser, director of Dunedin, is joining the board. David Shooter and Ian Wilson are the co-founders of the business.

Advisers

Equity - HBJ Gateley Wareing, Paul Hayward (Legal)Equity - Intuitus, Calum Stewart (Technical/IT AdviceUnspecified)Equity - Parthenon Group, Mark Jeynes (Commercial Due Diligence)Equity - The Quinn Partnership, Paul Quinn (Other Due Diligence)Equity - Vantis Corporate Finance, Rebecca Geurin (Financial Due Diligence)

Sourced from: UK & Ireland unquote" 361 (Jan 2008)