Alstom Automation Group - Materials Handling

A management buy-out of the Alstom Automation Group has now been completed with the backing of Gresham Trust, who are taking a majority stake in the business. Total funding for the transaction amounted to £53 million.

Alstom Automation provides specialised materials handling solutions and services for customers throughout the UK and Europe in five key market sectors: nuclear and thermal power, defence, airports, and a broad spectrum of logistics operations.

The Group, which has its headquarters at Whetstone in Leicestershire, employs 950 in the United Kingdom, France and Spain and begins life under its new ownership with a healthy order book worth more than £150 Million. This includes significant contracts in South East Asia and North and South America.

Its management team is led by Martin Melling, aged 54, who is continuing as Group Chief Executive, aided by Gary Wesley, aged 42, who remains Group Finance Director. The non- executive Chairman will be Stuart Doughty, aged 56, a former Director of Hyder Plc.

Stephen Craik of KPMG Corporate Finance originated the deal and advised the management team.

Alstom Automation has strong potential for growth in three of its key markets: nuclear, defence and logistics.

The Group leads the UK nuclear fuel handling sector, providing dedicated systems and services for receiving and installing new fuel into reactors, and for removing spent fuel. Its spent fuel storage technology is being utilised in both the US and European nuclear markets which, together with a strong decommissioning capability, provides future growth prospects.

In the UK defence sector the Group focuses on niche areas such as weapons handling systems and munitions lifts for ships, together with pumps and motors for the UK nuclear submarine fleet. Its logistics business in France, Spain and the UK is well placed to take advantage of the handling and distribution needs of the fast-growing e-commerce market, where it will operate primarily as a materials handling system integrator.

The Group's airport business has already included the provision of the UK's largest baggage handling facilities, covering much of the equipment and associated software management systems at Gatwick and Heathrow. The Group has a close working relationship with BAA for whom it also provides operation and maintenance services.

On behalf of Alstom Automation, Martin Melling comments "We welcome Gresham Trust's backing for this transaction, which marks an exciting future for the Group in its new and independent status."

Simon Inchley of Gresham Trust says, "We are investing in a business where major actions have been taken to focus on core profitable business areas which are in growing markets and in which Alstom Automation has a leading position. The Group has a strong order book and a bright future given its world class reputation."

This purchase from the parent Alstom Group has been completed by Gresham Trust's Birmingham office, and is its second deal since it opened six months ago. Bank of Scotland Structured Finance provided the senior debt and working capital facilities.

The Gresham Trust team was led by Simon Inchley and Peter Naylor. Legal advice was provided to Gresham Trust and Alstom Automation by Pinsent Curtis led by Jim Lavery. Legal advisers to the Management team were Martineau Johnson & Co. Banking facilities were provided by Trevor Foster and David MacDonald of Bank of Scotland who were advised by Pat Johnstone of Eversheds. The Alstom Group was advised by Lovells and Lazards.