Indian investors eyeing up takeover targets

It is the latest example of cash-rich buyers from emerging markets looking to invest in the region's specialist companies and follows the acquisition of Sheffield heavy engineering firm DavyMarkham by India's Hindustan Dorr Oliver in March.

The new holding company, Ardsley Industrial Ventures (AIV), has instructed Leeds accountancy firm Garbutt & Elliott to develop a portfolio of businesses in strategic sectors including electronic controls, engineering, aerospace, steel fabrication and nuclear or renewable power generation. It plans to buy between 15 to 20 companies.

AIV is registered and domiciled in India and, according to its website, is backed by private family wealth. It is headed by Shayne John, a member of the family based in the United States.

Mr John is a former fund manager who specialised in US equities and Asian emerging markets. He is overseeing investment strategy and overall group direction and is based in Atlanta, Georgia.

John Stitchman is finance director and is leading AIV in the UK. The former Yorkshire corporate financier is currently the managing director of Norfolk-based H&S Engineering Limited, which is believed to be the company's first acquisition.

Richard Feltham, of Garbutt & Elliott, said AIV has "many millions" to spend and is looking to acquire businesses with turnovers of between 2m to 4m, which with a cash injection, exposure to new markets and managerial guidance can double in size.

He added: "They can currently be profitable, break-even, or even loss-making enterprises as long as they have solid potential and we are also keen to talk to those seeking an exit route as they approach retirement or industrial groups seeking to off-load non-core enterprises.

"AIV is a cash buyer which is particularly attractive in the current climate when bank funding remains difficult. An important common factor must be that the enterprises have real potential through their in-house expertise, product ingenuity or capacity for further innovation or exploitation.

"As India is now an industrial powerhouse with a fast-growing economy it is heartening that they have chosen to focus on Yorkshire and the North of England where it believes that a large proportion of the eventual portfolio will ultimately be based."

He would not comment on the origins of the family's wealth.

AIV will be looking for a long-term, multi-generational ownership in the businesses. Garbutt & Elliott said managers will be given a high degree of independence and accountability.

It said the family is "not interested" in quick disposals or asset stripping and is "committed to staff development and community social responsibility".

AIV has looked at around 10 Yorkshire companies so far, including two or three in Sheffield and one in Tadcaster; these did not match criteria so it did not proceed. Last month it bought Impactbond Ltd, a Norfolk-based steel fabricator.

AIV intends to develop businesses by providing them with growth capital, corporate governance, corporate and product strategy, industrial skills, new markets and partnerships.

Keeble Hawson, the law firm with offices in Sheffield and Leeds, is providing legal advice to the team.

GROWING ECONOMY DRIVES EXPANSION

India's diverse economy and young English-speaking workforce has driven growth of around seven per cent per year since the late 1990s and helped it to avoid the worst of the financial crises suffered by debt-laden Western economies.

Cash-rich buyers in India and other emerging market economies have been taking advantage of low prices and steadily buying up strategic assets in the UK.

Richard Feltham, of Garbutt & Elliott, said: "There is a large amount of capital being raised on the Indian stock markets and there is a shortage of the know-how and technology that exists in the UK. There are more and more opportunities for joint ventures between the two countries."