Business Growth Fund (BGF), the independent company established to help Britain’s growing businesses, today announced its investment in VTL Group, one of the UK’s largest manufacturers of precision-engineered components for the automotive industry.
BGF has invested £4m of growth capital in the company and will take a minority stake and a seat on VTL’s existing board.
This is BGF’s 10th investment in the manufacturing sector and its first in the automotive industry. Since its inception in May 2011, BGF has injected c. £45 million of growth capital into UK manufacturing businesses.
VTL is one of the largest UK developers and manufacturers of precision engineered transmission and turbo components for the commercial vehicle and passenger car markets. VTL supplies these components to major automotive manufacturers including Cummins, Toyota, Renault and Nissan and also provides a variety of additional services including product R&D and prototyping.
Formed in 2001, VTL has developed from a single product, single site European focused business, to a global operation, manufacturing multiple products and employing over 400 people generating annual revenues in excess of £50m.
BGF’s investment will enable VTL to grow the business organically by developing new customers in the automotive sector and increasing the range of components it manufactures for existing customers. The current funding package and access to further growth capital will also provide the financial means to pursue other acquisitions and investments in the future.
Alongside its equity investment, BGF has contributed additional support to the company through the introduction of Michael Baunton as Non-Executive Chairman. Michael has an extensive background in the automotive sector and joins VTL from the Society of Motor Manufacturers and Traders (SMMT) where he was Interim Chief Executive. Prior to this, his roles included President and MD at Tenneco, President at Perkins Engines and Vice President at Caterpillar. He is also currently on the board of TT electronics plc and ACAL Energy. Michael was awarded a CBE in 2004 for services to the automotive and engineering industries in the UK.
VTL is headquartered in Huddersfield, where it also has four manufacturing facilities and an R&D centre. In addition VTL has a manufacturing facility in Charleston, USA, a manufacturing facility in Dharwad, India and a sales and technical presence in Yokohama, Japan. VTL serves customers across Europe, North America, India and Asia.
BGF Business Director, Mark Bryant, who has over 30 years experience in building manufacturing businesses, commented:
"BGF has invested in a number of exciting manufacturing businesses to date and it is fantastic to be able to welcome VTL into this group. Employing over 300 skilled staff in the UK alone, VTL is a prime example of a manufacturing firm with its heart in the UK and operations across the globe.
"Automotive manufacturing has seen impressive growth over the last 16 months with 1.6 million cars now being built and the UK has again become a net exporter of cars for the first time since the seventies. Add to this the opportunity to produce a further £3 billion tier 1 and £6 billion tier 2 to tier 4 components within the UK supply chain, the potential for growth is very clear for ambitious companies.
"BGF funding has put VTL in pole position to capitalise on this opportunity. It will allow the business to grow organically by developing new customers in the automotive sector and increasing the range of components it manufactures for existing customers. It will also provide the financial means for VTL to pursue other acquisitions and investments in the future.
"I believe VTL has a great future and we look forward to working with CEO Bruno Jouan and the rest of the team."
Mark Bryant added:
"Aspiration and ambition is critical to growth. It must be applauded and properly supported, but ambition alone cannot take a business to the next level. I urge business owners to consider equity finance as a means to fund growth and have the confidence to plan for the future."
Bruno Jouan, Chief Executive Officer of VTL, commented:
"Engineering firms such as VTL have the power to drive the UK economy for many years to come provided that we continue to invest appropriately in R&D, new products and highly skilled people. This is precisely what we have been doing at VTL for the past twelve years and with help from BGF, will continue to do but at an accelerated rate. From the outset, BGF demonstrated an interest in our business above and beyond that of a typical investor and having spent time talking to them over the past few months, we feel confident that they are the right fit for us.
"We see a number of exciting ways to grow the business organically and acquisitively both here in the UK and overseas. Our partnership with BGF and continued support from HSBC will enable us take advantage of the significant growth opportunities in the automotive component manufacturing and development markets."
Michael Baunton, incoming Non-Executive Chairman of VTL and former interim CEO of the Society of Motor Manufacturers and Traders, commented:
"I am delighted to be joining the board of VTL at such an exciting time in its development. Its growth opportunities have been given a significant boost with BGF’s investment and the company and its management team have impressed me with what they achieved to date. I hope to be able to add significant value to VTL through my contacts and experience in the automotive industry."