Advent makes £221m bid for struggling industrial group Brammer

Brammer’s shares jumped after  Advent’s offer was revealed

Shares in industrial parts maker Brammer have soared almost 70pc after the company agreed to a private equity takeover bid.

 Advent International has made an all-cash cash offer of 165p a share, valuing Brammer at £221.5m. The approach represents a 69.2pc premium to the company’s closing share price on Tuesday.

The bid follows Brammer’s downbeat trading update last month when boss Meinie Oldersma warned it was on track to post an annual loss and was facing the prospect of having to undertake a rights issue to reduce debt. The announcement wiped 50pc off Brammer’s stockmarket value.

Brammer was started in Leeds in 1920 when founder Harry Brammer raised capital on the back of his inventions, including a belt used in industrial machines. By 1960 the company had floated, employed 650 staff and exported to 60 foreign markets.

Brammer makes products including chain drives used in industry

Announcing Advent’s bid, Brammer said a review had turned up “a number of material operational issues”. The board added that “addressing the operational issues” and delivering a turnaround would be “complex, require significant structural and behavioural changes, incur significant cash reorganisation costs and take at least three years to implement”. This carried “significant execution risk and uncertainty for a public company”. it said.

As a result, directors said they had decided selling the business was the best option, given Advent’s “operational expertise and experience in the distribution and power manufacturing sectors”.

Advent has more than $40bn in assets under management, is a major player in the field and has made more than 300 private equity investments in 40 countries.

So far Advent has secured the backing of 15.58pc of the shareholder base for the deal.

Bill Whiteley, chairman of Brammer, said: “The board is unanimously recommending the offer, which represents an opportunity for shareholders to realise value for their investment in cash at an attractive premium. Advent is a leading global private equity firm, and its proposal provides a high degree of certainty for shareholders, employees and customers.”

In 1969, Brammer bought Bearing Service, a distributor of replacement industrial bearings, starting the business down the road of becoming a leading supplier of industrial maintenance and repair.

In 2006, all of these businesses were brought together under the Brammer name. The company now has 3,600 people in more than 23 countries.

 source: Telegraph