Mon, Apr 11, 2022

Kroll Advises on Nasmyth Group’s Investment from Rcapital

Nasmyth Group (“the Group”), a UK provider of specialist precision engineering to the aerospace, defence and related industries, has secured a new strategic equity partner to deliver its next stage of growth in a deal led by Phil Dakin.

About Nasmyth Group

Nasmyth Group is an established supplier of high-quality precision engineering products operating across an array of sectors including aerospace, defense, marine, medical, space, energy and specialist automotive markets. 

Since 2003, the Group has continued to grow both organically and through acquisition, now with five divisions encompassing complementary precision engineering businesses across 10 sites in the UK, U.S. and India and with operations based in the Philippines. 

Given COVID-19-related market challenges—particularly in the civil aviation sector—the Nasmyth Board took the opportunity to seek a recapitalization of the Group at an opportune time to enable a competitive advantage as the market recovers.

The Role of Kroll and Its Outcome

The Group appointed Kroll as the financial advisor tasked with finding a strategic equity partner that would work with the existing management team to take the business forward and aid longer-term growth strategy in the UK and internationally.

After assisting management with the preparation of a financial forecast and a detailed information memorandum, Kroll conducted a two-stage process with emphasis placed on a targeted group of private equity platforms with similar assets in their portfolio and growth/turnaround investors.

During the first round of the process, 10 offers were secured with the majority offering material value to the existing shareholder group despite market challenges.

Following an assessment of the offers with the Group’s Board of Directors and recommendation from Kroll, four parties were invited to the second round of the process and Kroll quickly coordinated multiple diligence workstreams to crystallise final offers in short order.

Rcapital was identified as the preferred bidder following final offers, securing a transaction that not only enabled funding so that the business can deliver its next stage of growth, but also resulted in significant retained value to the existing shareholder management team.

In conjunction with the above, Kroll also ran a concurrent process to secure debt facilities to provide additional liquidity to support a strategic equity partner.

Kroll secured 14 offers from a variety of lenders, including both high-street banks, ABL providers and debt funds. Secure Trust Bank ultimately provided an additional £20 million new long-term debt facility as part of the transaction with RCapital, having initially been introduced to the Group by Kroll.

The Group has built up an impressive order book, and now has the luxury of a strong balance sheet, long-term committed debt facilities, and the ability to make further acquisitions to drive growth and value in the future.

With the luxury of a strong balance sheet, long-term committed debt facilities and the ability to make further bolt-on acquisitions, Kroll helped the Group to build on its strong order book and enabled it to drive more growth and value going forward. 

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