MB Aerospace Management Team Completes MBO

By webmaster

April 24, 2007

The management team of MB Aerospace Ltd and MB Faber Ltd, two of the main subsidiary groups of the Lanarkshire-based engineering contractor Motherwell Bridge, has announced that it has completed a management buyout.

MB Aerospace Ltd and MB Faber Ltd have been sold to new company MB Aerospace Holdings Ltd which will be headed by Craig Gallagher, managing director of MB Aerospace Ltd, and his financial director Gordon Kerr.

The deal was backed by private equity firm Lloyds TSB Development Capital which has taken a majority stake in the business.  The transaction was supported by senior debt provided by the Royal Bank of Scotland.

The management team reached agreement with parent company Motherwell Bridge recently, after three months of negotiations. Hugh Hayes, chairman of Motherwell Bridge, has also been invited to join the new company as non-executive director.

Commenting on the MBO, Mr Hayes said: “Over the course of the past four years MB Aerospace and MB Faber have undergone major restructuring and as a result have returned to profitability.  They are now successful businesses in their own right and I’m delighted that Craig and his team had the ambition and enthusiasm to mount a MBO.

“The sale of our aerospace operations in such a positive way is extremely beneficial to both parties.  Motherwell Bridge can now concentrate on developing its oil and gas interests both in the UK and overseas, and the aerospace business units now have the opportunity to develop further under an established incumbent management team.”

MB Aerospace Ltd employs over 110 staff across two sites in Motherwell and Burnley and specialises in the manufacture, test and assembly of defence and commercial aerospace systems and components.  Headquartered in Leyland, Lancashire, MB Faber employs 75 staff and specialises in mechanical handling solutions and jig &tool design.

Craig Gallagher, chief executive of MB Aerospace Holdings Ltd, said:  “MB Aerospace has had a remarkable journey under Motherwell Bridge.  When I came on board as managing director in 2003 the company was on the brink of collapse but with the support of a committed workforce, we have spent the past four years turning things around. We are now trading strongly, our order book is very healthy and I feel the time is now right for MB Aerospace and MB Faber to come together and follow their own path within the aerospace and precision engineering sectors.

“MB Faber has had a similar journey and with a strong reputation for design, its recent growth in the aerospace sector will be further enhanced in the new model.

“Our strategy now will be to develop our service offering to complement the growing opportunities within the sector, namely supporting aftermarket components and platforms in late product life in addition to those platforms requiring specialist engineering design in early phase product introduction.

“This particular area will require sustained investment in engineering resources and skills development and this will enable us to strengthen the services that we offer to our key customers. We will also continue to invest in staff development as it is our employees who are our greatest asset. 

“Due to the performance of MB Aerospace and MB Faber, MB Aerospace Holdings Ltd has the advantage of already having a solid reputation with some of the leading players such as Boeing, Airbus and Rolls-Royce plc and we will look to build on this.” 

In November 2006 MB Aerospace became the first company in the UK to receive gold supplier status from Boeing and recently secured a $15 million contract with the leading aerospace company.

News of the Boeing contract followed a £25m order to supply chain manage and manufacture a range of aftermarket aero-engine ring components for Rolls-Royce plc.

Craig Gallagher said: “Lloyds TSB Development Capital and the Royal Bank of Scotland have invested a significant sum between them which demonstrates their belief in the business and the MBO team.”

John Swarbrick, senior director at Lloyds TSB Development Capital, added: “MB Aerospace Holdings has exceptionally strong relationships with the leading names in the aerospace industry.

“We’re backing an experienced and motivated management team which has the expertise to further enhance these relationships and deliver significant growth in the business.

“Going forward we’ll be working closely with the team to ensure the company is well placed to capitalise on a market which is growing strongly.”

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