Background

The shareholders of Giro Engineering Ltd, a specialist designer and manufacturer of high-pressure fuel injection pipes based in Southampton, were interested in selling their stake in the business. The shareholders wanted to take a step back from the business, but it had to be for the right price and to the right custodian of the company. FRP’s Corporate Finance team was appointed to lead the sales process, working alongside the shareholders’ personal adviser, Professor Ian Ryder.

Action

The specialist nature of the business required the team to gain a deep knowledge of the global market, competitive forces and market trends. Having drawn up a shortlist using thorough buyer research and analysis, the team ran a competitive marketing process to introduce the opportunity to UK and international trade parties, and specialist investment funds which included private equity and family offices.

Several offers were received from the UK and overseas. After initial discussions with the bidders to understand the nuances of their respective offers, a preferred bidder was selected. Our Corporate Finance team then assisted with the negotiations of the transaction, managed the sales process, and advised the shareholders closely throughout the process to completion.

Outcome

Giro Engineering Ltd was successfully sold to Heinzmann GmbH & Co, a leading European operator with revenues of €60m, and operations in eight countries including Germany, China and USA. Giro and Heinzmann operate in a specialist market where significant value can be achieved through strategic acquisitions; Giro will now benefit from the knowledge and contacts of Heinzmann, enabling further business growth, while Heinzmann can enjoy the synergies of bringing high-pressure pipe procurement within the Group. As a combined group the business will be able to reach new markets and supply a wider range of products.

The shareholders consideration was satisfied fully via cash on day one, allowing one of the majority shareholders to successfully retire after a short handover period; the other majority shareholder will continue to be involved in the business. The shareholders also have the possibility of benefiting through a potential earn-out.

Craig Parker, Director at Giro Engineering: “We have very much enjoyed working with the team at FRP during this process and their skill and commitment to delivering what was a mutually beneficial deal for all involved was key to this. Right from the start of this process, the continuing support and success of our customers, and the well-being of our employees, have been a critical element in our choice of purchaser. We believe that HEINZMANN is a really superb company with a well-matched culture and ethos which will herald an exceptional future for us both.”