Buy-in secures Philidas future

Deal could lead to more jobs INFAST Philidas, the Yorkshire manufacturing business threatened with closure, has been sold to a management buy-in team in a multi-million pound deal. David Parkin Business Editor

The company, which is based in Pontefract and employs around 118 people, manufactures metal fasteners for automotive and industrial companies and has a blue chip customer base including Ford, BMW, Jaguar and Bosch.

The buy-in has been led by entrepreneur and engineer Roy Jones, who becomes managing director of the firm, which will be known as Philidas.

It had turnover of 7.9m in the 12 months to the end of December 2004 and made a trading loss of 800,000.

Around 110 million fasteners are produced in the factory every year but it is estimated that its current facilities could comfortably accommodate production of around 250 million units a year.

Under the terms of the sale, Mr Jones will acquire the net trading assets of the business for an initial cash consideration of 400,000, plus deferred consideration of 300,000. The book value of the net assets of the business is around 2.9m.

Mr Jones, a Lancastrian who has an engineering background, has lived in Ontario, Canada for the past 20 years. He has a reputation for successful buy and build strategies on both sides of the Atlantic and is already at an advanced level of negotiation with a number of prospective blue chip customers.

The deal was financed by the Leeds office of Euro Sales Finance, a subsidiary of the Royal Bank of Scotland.

Facilities at Euro Sales Finance were structured by Paul Woodhead, associate director, who only became involved with the MBI opportunity three weeks ago.

"We are delighted to assist with the provision of working capital and term loan facilities to this new venture, as part of the buy and build strategy to be implemented by Roy Jones," said Tom Flannery, director of Euro Sales Finance.

Patrick Abel, corporate finance partner in the Sheffield office of accountants PKF, was lead adviser to the purchaser with David Ware, head of corporate finance at Wake Smith solicitors in Sheffield, leading the legal team on behalf of the purchaser.

"This deal not only helps to safeguard existing jobs but will open up opportunities to expand the business which could lead to the creation of new jobs," said Mr Abel.

Last year the Infast Group announced its intention to close or dispose of the Pontefract factory following a review based on a decision to move out of manufacturing. The name of Philidas is synonymous worldwide with specialist fasteners and has strong business links in Europe and the Far East.

The sale by Infast, which is quoted on the London Stock Exchange and specialises in inventory management, marks its complete withdrawal from manufacturing.

Graham Titcombe, chairman of Infast, which has its UK head office in Gloucester, said: "Having exited from manufacturing, Infast is now positioned to focus fully on its value added inventory management businesses."