Skip to main content

Posted: 25 Jan, 2021


BREAL Zeta provides £16m ABL facility to support the acquisition of Evtec Automotive out of administration, saving 100 jobs and creating up to 50 more


BREAL Zeta has structured and delivered a £16m asset-based lending (ABL) facility to enable David Roberts, industrialist and former group chairman of Arlington Industries until 2014, to acquire Arlington Engineered Systems out of administration. 
 
The acquisition and working capital finance package, which comprises funding against receivables and real estate, as well as a £3m term loan, has secured the acquisition out of administration of a critical supplier to the automotive industry. 
 
The deal, which sees David Roberts take on the role of Chairman, will enable newco, Evtec Automotive (‘Evtec’), to recommence its operations and make further investments in its team and core services. As part of its growth strategy, Evtec will seek to drive turnover from £55m to £70m over the next three years.
 
The move will save up to 110 jobs and will create 50 more. David Roberts plans to return the business to its Remploy heritage, ensuring opportunities for disabled people across the West Midlands.
 
Headquartered in Coventry, Evtec Automotive specialises in manual assembly for the automotive sector, including the provision of electrical, fluid and air, mechanical and aftermarket module assemblies. The business will continue to work with clients such as Jaguar Land Rover and Ford as they gear up production following the coronavirus pandemic.
 
Commenting on the deal, David Roberts, Chairman of  Evtec 
Automotive, said: “When we kicked off the process, it felt like the debt markets were no longer there for the automotive industry as they had been in the past. It quickly became apparent that we would need to explore alternative funding options away from the traditional banks. When we met with the team at BREAL Zeta, I explained precisely where we were with the potential acquisition and what we needed and they asked all the right questions. They responded quickly with an innovative deal structure that would not only fund the immediate acquisition but would also provide on-going working capital to help the business to secure further growth. There were many twists and turns along the way and BREAL Zeta managed their way through each of them diligently and responsively.”
 
He continued: “BREAL Zeta is an entrepreneurial lender with a refreshing and creative approach to deal structuring. From speaking to their team, I knew that they would come through and deliver the deal in spite of the challenges facing the industry as a whole and they showed real flexibility in terms of the concentration levels we have with some of our major clients. The team at BREAL Zeta was absolutely phenomenal to work with. They approached the transaction as a true partner, not just as a lender, and we genuinely couldn’t have done the deal without them.
 
“Arlington Engineered Systems was a strong and cash generative business, however, the immediate result of the coronavirus pandemic impacted the firm in a way no one could have predicted. Now that production across the automotive sector has kicked back into gear, I believe there is still a strong future for the firm and with the right leadership and financial support I’m confident that we can drive future growth. My immediate focus is to support the team and established customer relationships, and I will then be looking to refocus the business by taking it back to its roots. Evtec Automotive is based on driving innovation through integration. We are particularly excited at the prospect of working with the leading EV marques as we offer the most complex and flexible ‘poka-yoke’ assembly processes that robots just can’t. We look forward to driving the business forward with the continued support of BREAL Zeta.”
 
Robert Wakeford, Managing Director, UK Sales at BREAL Zeta, said: “This was very much a deal founded and funded on experience. We always look to see the potential in businesses at the heart of Britain’s automotive and manufacturing heritage and are proud to support the management team at Evtec Automotive in achieving their ambitions. We applied our insight and understanding of the automotive sector and its challenges, as well as maintaining a strong focus on both credit and effective deal delivery.
 
“BREAL Zeta’s mix of debt and acquisition funding has provided a critical lifeline for the business, securing the continued employment of 110 members of staff and offering exciting new horizons under new ownership. As the business continues to step up its recruitment activity, Evtec will provide more employment opportunities for people with a disability across the region by maintaining that at least 35% of its workforce has some form of disability. We are proud to have made this deal a reality for David and his management team.”
 
Annabel Todd, Business Development Director at BREAL Zeta, said: “Under David’s leadership, we’re confident that Evtec Automotive has a strong future and it’s been a pleasure to provide the flexible financial package that will not only support employment opportunities for people across the West Midlands but will also create a business that is truly focused on making a difference to its local community.”
 
Andy Pickford, Director at FRP in Manchester, added: “We’re thrilled to have secured a sizeable financial package from the team at BREAL Zeta that gives David the financial backing he needs to kickstart his growth plans, and their support is a sign of confidence in David and his team.”

BREAL Zeta worked closely on the transaction with Duff and Phelps and FRP in Manchester, with financial due diligence support also provided by FRP’s corporate finance team. Collateral due diligence was provided by European Valuations. BREAL Zeta was advised by Gateley (legal) and David Roberts was advised by Thrings (legal).


Back to News

TMA news

02 Mar, 2021

TMA NextGen Mentoring Session: Two Leadership Styles That Will Set You Up For Life

Last week, TMA NextGen hosted a mentoring session...

24 Feb, 2021

Budget 2021: Will the Government Extend Business Support Measures?

On Monday Boris Johnson revealed his ‘roadmap’...

08 Feb, 2021

COVID-21: Present and Future of Corporate Turnarounds

2020 was a gruesome year and many of us...

Sponsor news

04 Mar, 2021

Impact of Brexit on applicable law in cross-border insolvencies

From 31 December 2020, the European Regulation on Insolvency Proceedings (the “EIR”) ceased to...

19 Feb, 2021

Hilco Valuation Services Europe Hires Nick Hughes

Hilco Valuation Services Europe (HVSE) and Hilco Real Estate Advisory UK and Europe whose service...

Tweets

TMA UK @UK_TMA · 9 days ago

Budget 2021: Will the Government Extend Business Support Measures? On Monday Boris Johnson revealed his ‘roadmap’… twitter.com/i/web/status/1…

TMA UK @UK_TMA · 11 days ago

TMA UK have a wide range of events taking place in the coming weeks. Visit our events calendar for more details… twitter.com/i/web/status/1…

JCR

Jan / Feb 2021