UK - Duke Street Capital buys global engineering firm

Deloro Stellite is a leading global engineering firm with a blue-chip client base that includes Siemens, Rolls Royce, Ferrari, Ducati, Alstom, GE and Tetra Pak amongst others. For the year to December 2005 the company had revenues of over $200m.

Deloro Stellite has an international reputation and a leading technological position as an innovator of advanced metal-based solutions to wear problems experienced by its customer’s with engineered components that operate in aggressive environments involving heat, erosion, abrasion and corrosion.

Operating in the automotive, aerospace, power generation, oil and gas and medical sectors from nine manufacturing sites across Europe, North America and the Far East, these solutions often commence with the development of a sophisticated Cobalt- or Nickel-based superalloy.

By utilising in-house casting, powder metallurgy or coating processes, these alloys are converted into components often having complex geometrical shapes, that are then finish-machined into a certified product ready for use by the customer, or into a consumable product for sale to an end-user.

The group’s extensive experience and knowledge of how to manufacture and finish-machine these difficult-to-manufacture alloys, allow the group uniquely to offer an end-to-end manufacturing service to its customers. The global strength of the ‘Stellite’ and ‘Deloro’ brands and the group’s reputation for producing high quality products that deliver significant end-user benefits such as extended life, reduced down-time and high temperature resilience, have resulted in long-term trading relationships with its clients.

DSC is backing the existing management team. Following the acquisition, DSC and the management intend to focus on maximising Deloro Stellite’s global reach and targeting high growth end-user markets. In addition the company’s Shanghai operations have strong potential to become a long-term, high growth manufacturing base. Further growth is likely to come from cross-selling opportunities as well as acquisitions.

DSC will provide strategic support and additional equity investment to grow the business from its existing sound commercial and financial base, as well as proactive assistance to identify and secure acquisitions.

DSC used LEK for market due diligence, KPMG for the financial due diligence, AON for the insurance due diligence, ERM for the environmental due diligence and Clifford Chance for the legal documentation.

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