Management pays ‘tens of millions’ for fuel maker CPL

CPL, Europe’s largest manufacturer of smokeless fuel products, will now be 20 per cent owned by its management team, led by chief executive Tim Minett and finance director Darren Wake.

The other 80 per cent will be owned by CPL’s private equity shareholder Vision Capital in a deal part funded by Lloyds Bank Commercial Banking.

RBS, the previous majority shareholder, and two former members of the management team have quit the Chesterfield-based business.

Previously RBS had a 46 per cent stake, Vision had a 39 per cent stake and management held the remaining 15 per cent.

Mr Wake refused to be drawn on the exact cash value of the MBO, but said it was in “tens of millions”.

CPL was founded in 1973 from the non-mining operations of British Coal and was privatised in 1995 following a management buyout. The current management team have been in place for six years.

Sales have risen 45 per cent to £140m during that period.

Mr Wake said the deal comes at a time when there is an increasing demand for environmentally friendly fuels at petrol forecourts and DIY chains.

“The upsurge in demand for smoke-free fuel is partly due to some very cold winters,” he said.

“It is proving to be economic as the price of gas increases. People are opting to buy two or three bags of coal as opposed to turning the gas on and not knowing what the gas bill will be.”

He added that the steady increase in popularity of multi-fuel stoves, which can burn logs, smokeless fuel and smokeless solid fuel, is also driving sales.

CPL, which has 500 staff, makes 300,000 tonnes of smokeless solid fuel briquettes for home heating a year.

The company has a range of brands, including Homefire and Ecoal, the best selling eco-friendly solid fuel.

It sells direct to households and through supermarket chains, DIY stores and large petrol forecourt operators.

CPL has also developed an export business, with sales to France, Germany and Ireland generating a significant part of overall revenues.

Mr Minett said the deal reaffirms the management team’s long-term commitment to the business.

“We remain confident of further growth, particularly in key European markets, through the development of green fuels,” he said.