Private equity giant Endless has announced the turnaround of an automotive supply giant, saving five European factories from collapse and many hundreds of jobs on the continent.
Leeds-based Endless LLP this morning revealed the turnaround at Brabant Alucast International (BAI) in a move said to have protected many local communities from the devastating social, economic and human consequences that can follow from the closure of a major employer.
Endless has sold a substantial part of BAI, a specialist in the design, development and production of aluminium and magnesium components, to Shiloh Industries, a NASDAQ-listed industry expert.
In its first pan-European deal, Endless acquired the heavily loss-making BAI and its five operating sites in the Netherlands, Italy, Germany and the Czech Republic two years ago.
The group was struggling and in a poor state of repair after pursuing a low-pricing strategy to win contracts and fill its factories with work.
In February 2016, Endless stepped in and stabilised BAI, securing 1,200 jobs in the process, and set about changing the management, improving organisation culture, bringing in operating efficiencies, sorting out loss-making contracts and disposing of a non-core foundry in Strakonice in the Czech Republic through a management buyout.
Endless also pumped more than €17 million into an aggressive factory modernisation programme, allowing BAI to ramp-up new contracts to supply customers BMW, JLR and Alfa Romeo and creating a new foundation and engine for profitable growth.
The €140 million-turnover business is now delivering healthy returns and has seen a €20m improvement in Ebitda over the last 24 months.
The transaction with Shiloh Industries concerns the newly modernised plants in Oss in the Netherlands and Verres in Italy.
Jamie Brundell, chief executive of BAI, said: “Our team members, products and technologies in Oss and Verres combined with the improved customer relationships will be instrumental in supporting the continued expansion of Shiloh Industries globally.
“The enlarged business is very well placed to capitalise on rising demand for lightweight metals to the global automotive industry.
“Manufacturers must reduce emissions and need metals like magnesium and aluminium to keep vehicle weights to a minimum.”
Francesco Santinon, partner and head of London office, and Matthew Jubb, investment director, led the Endless investment in BAI.
Mr Jubb said: “BAI is radically improved after two years in our ownership. We are very proud of the scale of this turnaround and the impact our investment has had at all five sites in creating factories for the future and protecting highly skilled local jobs.
“We believe the Oss and Verres factories have a bright outlook as part of Shiloh Industries.”
Mr Santinon added: “This successful investment demonstrates the growing capabilities of Endless and our ability to make a positive difference to businesses, communities and individuals.
“We continue to look for transformational opportunities in the UK and Europe, guided by our philosophy of maximising the positive impact our investments have on the economy and society.”
The transaction highlights the increasing importance of alternative lighter weight metals and manufacturing technologies in an industry under pressure to reduce emissions.
Endless is in discussions with parties interested in the remaining plants at Wendlingen in Germany and Heijen in the Netherlands.