Endless jackpot after sale of stake in steel firm

The Leeds-based private equity house made six times its original investment in the historic West Midlands business.

Acenta’s management, led by company veteran Tarlok Singh, bought out Endless for an undisclosed, multi-million pound sum with backing from GE Commercial Finance.

The business had sales of £82m last year and employs 343 people at six sites across the UK.

Acenta can trace its origins back to the 19th century and is the UK’s largest independent steel processor and distributor.

Mr Singh, chief executive, said: “Having spent nearly 40 years working at Acenta Steel and its predecessors, I am absolutely delighted with the deal to take this prestigious business into private ownership.

“We have a remarkable group of people here and I am proud to say that our future is truly in our own hands.”

He described Endless as a “first-class owner... contrary to many of the popular myths about private equity firms”.

Mr Singh added: “They invested at a time when others would not and fully deserve the outstanding investment return that they have achieved.”

Endless bought the business in January 2011 from US owner Niagara LaSalle.

Darren Forshaw, partner at Endless, said: “The business had a generally good history but had a few difficult years as everyone did in 2008 and 2009 as world steel demand dropped following the onset of the financial crisis.

“It was in the early phase of recovery and needed an owner that was prepared to believe in the recovery before it was probably properly proven.”

He said the business has since gone from strength to strength and delivered core earnings of £8m-£10m each year.

Mr Forshaw added: “It’s a real win-win scenario; a great exit and investment for us; the business is totally independent, run and owned by its management; it’s in a very strong financial position with low levels of debt and very strong profit prospects as well.”

The disposal is the first of the year for Endless, which completed its biggest deal to date when it backed the management buyout of Vion’s pork business and relocated the £500m business, renamed Karro Food Group, to Malton in North Yorkshire. Mr Forshaw revealed that the private equity house is in the exclusivity stage with two potential acquisitions and a third on the way. He said the firm’s pipeline of opportunities is “as strong as it’s ever been”.

Endless is seeing more non-core assets put up for sale and more distressed companies, particularly in the high street.

The turnaround specialist needs to see retail businesses before they reach a certain stage of distress to make a difference “and most opportunities are coming far too late”, said Mr Forshaw.

Endless tried to revive the department store chain TJ Hughes in 2011 but was unable to save it from administration, losing £3m in the process.

Its potential new acquisitions are in and around the fast-moving consumer goods sector, which, like retail, has suffered as shoppers cut back on discretionary spending.

On the general outlook, Mr Forshaw said: “As a house, we are planning for more of the same for the long term. We don’t see anything that will spur a great deal of movement either way.

“The only way to grow your business is to grow your market share. That’s what our portfolio companies are being tasked with – they need to be aggressive with their market place to grow their business.”

Endless has around 15 businesses in its portfolio, which have a combined turnover of nearly £1bn and around 10,000 employees.

Since launching Endless in 2005, Mr Forshaw and managing partner Garry Wilson have raised £500m to invest in UK business-es.

Fall in volume and value of deals

THE total volume and value of mid-market private equity-backed deals in Yorkshire and the North East fell in 2012 compared to 2011, according to new research from Lloyds Development Capital.

But dealmakers are predicting a nascent recovery in activity this year, said LDC.

The number of deals valued between £5m and £150m fell to seven last year compared to 14 the previous year. The total value of transactions fell by 59 per cent to £232m, down from £569m in 2011.

Across the UK, 203 mid-market buyouts were recorded in 2012, up from 190 in 2011.

Deal values increased 51 per cent to £8.8bn, added LDC.