Two newly-independent County Durham engineering firms are aiming to scale up their operations after securing six-figure investments from the North East Growth Capital Fund Supported by the European Regional Development Fund.
Alpha Process Controls and Aldona Seals were both recently acquired from the Knorr-Bremse Group, the German parent company of regional engineering firm GT Group, by former GT Group sales director John Lamb and Alpha’s design manager Ben Richardson through their ACCEDO Group holding company.
Having worked with regional fund management firm NEL Fund Managers to bring £200,000 investments into each company, John and Ben are now implementing growth strategies for both businesses which will see them enhancing their existing operations while developing new products and services to support emerging technologies.
A number of North East jobs are expected to be created as the businesses develop, while discussions are already underway around a new global distribution agreement with a major multi-national energy business.
Providing new opportunities for young people in the North East to get into the engineering industry through degree apprenticeships and other routes also form part of the firms’ growth plans.
Peter Rippingale, inward investment team manager at Business Durham, has worked with John Lamb and Ben Richardson on the development of the businesses, while Clive Owen LLP and Archers Law provided corporate finance and legal advice on the initial transactions and subsequent growth investment from NEL.
Alpha Process Controls is a world leader in fluid transfer process systems, and supplies bespoke safety valves and couplings to major firms in the oil and gas, medical gases and industrial sectors in more than 60 countries.
Aldona Seals manufactures a diverse range of hydraulic, pneumatic and rotary shaft seals for customers with specific design requirements for the compression and injection moulding of rubber.
John Lamb says: “Having been involved with the two businesses for many years, Ben and I recognised the potential that they have to innovate and grow, and bringing in these investments gives us the resources we need to make this happen.
“Our aim is to consolidate the services we offer for our core customers while also designing and developing new products and services which capitalise on their evolving needs and the emerging technologies that are driving them.
“While we’re targeting clients and markets around the world, we’re very firmly committed to remaining a North East business that will create new jobs and provide new opportunities within the region.
“The whole investment process has been completed remotely and everyone involved has done a fantastic job. Business Durham has supported us from the very first day that we started thinking about buying Alpha and Aldona, while the enthusiasm and commitment of the NEL team made the investment application process very simple.”
The North East Growth Capital Fund has been designed to create around 790 jobs in more than 70 regional firms over the life of the programme and offers unsecured investments of up to £500,000 to established businesses looking to realise their growth potential.
David Thomas, investment director at NEL Fund Managers, adds: “John and Ben presented us with a clear vision of how they plan to build on the strong market reputations of both businesses and how the growth capital we’re providing will enable them to achieve their commercial ambitions.”
Peter Rippingale, inward investment manager at Business Durham, says: “I have been pleased to have been able to help John and Ben through the management buy-out and investment process. These are two excellent, long-established local businesses.
“This investment will enable both companies to explore new markets and technologies, creating jobs and opportunities in County Durham, and we look forward to continuing to work with them as they grow.”
David Wilson, corporate finance director at Clive Owen LLP, adds: “It was a pleasure to advise John and Ben throughout the MBO process and then with securing their growth capital investment. NEL has a fantastic reputation and proven track record in supporting north east businesses and will be a vital partner for John and Ben as they look to deliver their ambitious plans for growth.
“Alpha and Aldona are two North East companies with global reputations, and I am sure they will go from strength to strength, creating employment opportunities and making a significant contribution to the regional economy.”
Daniel Flounders, partner in the corporate and commercial team at Archers Law, says: “It was great to be able to assist the management team through each stage of the transaction from its structure right through to its completion.
“While there were various hurdles to overcome throughout the matter, we worked intensely to manage and seek an effective and structured solution, highlighting that despite the current impact of COVID-19, there is still a commitment from the North East market for investment work to continue.
“There were added complexities around a ‘remote’ completion which had to be implemented, albeit I imagine this will be a common theme in the future even after we eventually get back to normal. I wish to express my congratulations to all parties involved in the matter and look forward to supporting John and Ben as the businesses grow.”
The overarching £120m North East Fund will provide financial support for more than 600 businesses across Tyne & Wear, Durham and Northumberland, creating around 3,500 jobs and delivering a legacy of up to £80m for further investment into the region.
For more information about NEL’s investment criteria, visit www.nel.co.uk or contact the investment team on 0345 369 7007.