Supporting a strategic acquisition with asset based lending

Industry: Manufacturing

Product: Asset based lending

Facility size: £14,500,000

The client

Established in 2002, this UK-based precision engineering group provides specialist manufacturing services to customers across the automotive, aerospace, defence and construction vehicle sectors. The business has built a strong reputation for delivering high-quality components to major manufacturers and was looking to strengthen its position through strategic growth.

As part of these plans, the group identified an opportunity to buy a long-established aluminium die-casting manufacturer, that has been operating for over a century. The deal would add specialist casting, machining and finishing capabilities to its offering, creating a stronger and more diversified operation.

The challenge

The take over represented an important strategic step for the business. Bringing die-casting capabilities in-house would provide greater control over the supply chain, broaden its customer base and reduce its reliance on demand from a single sector.

However, the transaction was complex:

• Funding was needed to support the deal
• Two established manufacturing businesses had to be integrated
• Day-to-day cash flow protection could not be impacted

In addition, challenging trading conditions in the automotive supply chain made careful working capital management essential throughout the process.

The solution

Close Brothers took a joined-up approach, working closely with the client to understand the immediate acquisition requirements and the firm’s longer-term growth plans.

We provided a tailored £14.5 million asset based lending package, bringing together several funding solutions within one coordinated structure. This included invoice finance, which released cash tied up in unpaid invoices to support day-to-day working capital, alongside a cash flow loan to provide additional liquidity during the acquisition and integration process.

As part of the wider financial solution, colleagues from Close Brothers Asset Finance supported the transaction with funding secured against plant and machinery. Using sale and hire purchase back they refinanced existing assets, releasing capital for the future requirements of the enlarged group, while keeping essential equipment in use.

Teams from across Close Brothers worked with the client, professional advisers and other stakeholders to keep the transaction moving and minimise disruption to day-to-day operations.

The result

The acquisition completed successfully, bringing specialist manufacturing capability into the group and strengthening its position across multiple sectors.

By integrating the die-casting operation, the business gained greater control over its supply chain while expanding its expertise and customer reach. The transaction also supported a smooth ownership transition, helping to ensure continuity for customers, suppliers and employees.

With a flexible funding structure in place, the company was able to maintain stability throughout the process, creating a stronger platform for future growth.