Motherwell Bridge in MBO

By webmaster

September 11, 2006

Motherwell Bridge Ltd, the Lanarkshire-based engineering contractor, has capped a remarkable three-year turnaround with the announcement of a management buyout backed by JOHCM Private Equity, (the private equity division of J O Hambro Capital Management Ltd).

Company chairman Hugh Hayes, who led the rescue of the loss-making business in 2003, and 11 other senior managers have acquired a 26% stake in the group, with the balance bought by funds managed and advised by JOHCM Private Equity, which has had a longstanding relationship with the company since being a shareholder of the old group prior to 2003.

The management team’s investment is around £3.9M and a new debt and banking package has been provided to the company by Royal Bank of Scotland.

Hayes said the management team had been pondering an MBO offer for some time and had considered a number of partners before deciding to work exclusively with JOHCM Private Equity on an offer to the bank syndicate and the old Motherwell Bridge pension scheme, which between them held a majority stake in the company. 

He said that the proposal had been accepted and with a great deal of effort the transaction completed on Friday 8th September.

He said: “The outcome of the deal is that the bank syndicate, which has supported us fully since 2003, recovers the debts it was exposed to at that time, and the old pension scheme receives an additional £5M to add to the £2.9M we’ve paid to it in the last three years as part of the compromise agreement set up at that time.

“I’m particularly pleased with this, as three years ago there were no other offers on the table which did anything for the pension scheme members at all.”

Jeremy Brade from JOHCM Private Equity said: “I have known Motherwell Bridge for several years since managing a shareholding in the old group, pre-receivership. I have stayed close to the company during its turnaround and I have the highest respect for the management team’s achievements during that time.

“We see it as a very well-run group that understands what it is doing, and which has a development plan we are keen to support. It is a great privilege once again to be involved with Motherwell Bridge and we look forward to a bright future for the group and its employees.”

Hugh Hayes added: “JOHCM Private Equity and the management team have invested £15M between them, and we wouldn’t have done this without a strong belief in, and commitment to, the future of the company.

“I’d like to thank the bank syndicate of Bank of Scotland, Royal Bank of Scotland, and Dutch bank Rabobank for their support throughout the last three years, without which the whole survival of the Motherwell Bridge group would have been in doubt.”

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