Insider Media Limited

Private equity specialist, Graphite Capital, has completed the management buy-out (MBO) of U-POL from private equity investor AAC Capital Partners. It is the second time that Graphite has invested in the Northamptonshire-based company, which manufacturers automotive refinish products, after backing a management buy-out in 2002. The MBO was worth £130m.

Eight years ago, Graphite invested in the business before growing it and selling it back to AAC three years later.

Graphite Capital has acquired a majority stake in the business. Partner John O’Neill said: “We are delighted to have the opportunity to invest in U-POL again. This is a first class business which manufactures and sells, under its own brands, high quality, innovative products and has substantial growth potential in a global market worth some £2.5bn.”

U-POL chief executive, Phil May, who joined the Wellingborough-based business in 2006, is leading the senior management team, all of whom are reinvesting a substantial proportion of their proceeds.

RBS, HSBC, Clydesdale Bank and Bank of Ireland have provided debt facilities.

U-POL has recently expanded, entering fast-growing markets like Russia, China and Africa and has increased its market share in more developed markets such as the USA and Western Europe.

O’Neill said: “We were impressed by U-POL’s strong trading performance since we sold the business in 2006 to AAC, which enabled us to crystallise an attractive return for investors in our 1999 fund. We know the business well and see excellent opportunities to work with the new chief executive, Phil May, and the management team to accelerate profit growth on a global basis.”

The MBO is the latest in a string of deals in the automotive sector for Graphite, which invested in tyre distributor Micheldever Tyre Services earlier in 2010.

Phil May said: “Graphite’s track record, operating style and familiarity with our business and the automotive after-market made them our first choice. They share our strategic vision of increasing our penetration of international markets to achieve our ambitious growth targets.”

John O’Neill, Kane Bayliss, Omar Kayat and Simon Fitch managed the U-POL transaction for Graphite.