VTL Group to create new jobs after £4m backing from fund

The VTL Group plans to grow organically and by acquisition after securing a £4m investment from the Business Growth Fund (BGF)

BGF will take a minority stake and a seat on VTL’s board. It is BGF’s 10th investment in the manufacturing sector and its first in the automotive industry.

VTL, which has 400 staff and a turnover of between £50m and £55m, is a developer and manufacturer of precision engineered transmission and turbo components for the commercial vehicle and passenger car markets. The company supplies components to automotive manufacturers including Cummins, Toyota, Renault and Nissan.

Bruno Jouan, VTL’s chief executive, said: “Engineering firms such as VTL have the power to drive the UK economy for many years to come, provided we continue to invest in research and development, new products and highly skilled people.

“This is precisely what we have been doing at VTL for the past 12 years and, with help from BGF, will continue to do, but at an accelerated rate.

“We see a number of exciting ways to grow the business organically and acquisitively both here in the UK and overseas.

“Our partnership with BGF and continued support from HSBC will enable us take advantage of the significant growth opportunities in the automotive component manufacturing and development markets.”

Formed in 2001, VTL has developed from a single product, single site European-focused business, to a global operation, manufacturing multiple products. VTL is based in Huddersfield, where it also has four manufacturing facilities and a research and development centre.

VTL has manufacturing facilities in Charleston, in the US, and Dharwad, in India and a sales and technical presence in Yokohama, Japan. VTL serves customers across Europe, North America, India and Asia.

Around 300 staff are based in Huddersfield, and Mr Jouan hopes to hire more staff in Yorkshire, particularly engineers, as the business expands.

BGF’s investment will help VTL find new customers in the automotive sector. It also plans to increase the range of components it manufactures for existing customers. The funding package and access to further growth capital will also provide the financial means to pursue other acquisitions and investments in the future.

Alongside its equity investment, BGF has supported the company through the introduction of Michael Baunton as non-executive chairman.

He joins VTL from the Society of Motor Manufacturers and Traders (SMMT) where he was interim chief executive.

Mr Baunton added: “VTL’s growth opportunities have been given a significant boost with BGF’s investment and the company and its management team have impressed me with what they achieved to date.

“I hope to be able to add significant value to VTL through my contacts and experience in the automotive industry.”

Richard Taylor, senior investment manager at BGF, said: “BGF has invested in a number of exciting manufacturing businesses to date and it is fantastic to be able to welcome VTL into this group.”

BGF is an independent company with capital of up to £2.5bn, backed by five of the UK’s main banking groups – Barclays, HSBC, Lloyds, RBS, and Standard Chartered. BGF is managed by an independent management team.

BGF will invest between £2m and £10m per business in return for a minority equity stake and a seat on the board for a BGF director. VTL was advised by Squire Sanders, while BGF received advice from Addleshaw Goddard, Sentio Corporate Finance and Smith & Williamson.