Car parts maker's sale set to further boost growth
Posted on the 3 September 2015
A fast-growing car parts maker in County Durham is set for further expansion after being snapped up by a global supply chain specialist.
DPE Automotive, which is based in Newton Aycliffe, has been acquired by Arlington Industries, a Coventry headquartered supplier of components to the automotive and aerospace industries, for an undisclosed sum. Arlington already owns Rempower, one of the largest automotive component assembly companies in the UK.
Now, following the acquisition of DPE Automotive in County Durham, Arlington has increased its offering of integrated manufacturing and assembly to automotive OEM’s.
The combined offering will streamline the customer supply chain, leading to lower costs, reduced carbon footprint, increased speed to market, reduced administration and improved technical partnerships.
As well as being pioneers in consolidating supply chains, Arlington has also a firm focus on industrial workplace equality. This embrace of diversity – reflecting both their customers’ customers and modern society as a whole – is unique in the market today.
Mark Frankel, CEO of Arlington, said: “Arlington Industries’ commitment to supply chain integration and workplace equality is something we’re rightly proud of. We have responded to the strategies of our customers in automotive and aerospace and will continue to look at ways we can drive greater efficiency. The acquisition of DPE Automotive will not only enhance growth, but also assist in the diversification of our customer base.”
The sale comes just a year after DPE Automotive was acquired by its management team in a deal driven by lead investor, Andrew Lapping of private equity firm Hamilton Capital and entrepreneur, Rudi Wright.
The Finance for Business North East Angel Fund, managed by Rivers Capital Partners, also invested in the company after the MBO.
That deal, back in May 2014, helped to preserve around 100 jobs at the company and enabled DPE Automotive to strengthen its position in the industry and target new customers to add to a client list which includes Nissan, Gestamp, Magna, RTEK, DS Smith and Johnson Controls.
Since then, DPE Automotive has invested in significant new equipment, expanded its press shop facilities at the factory, ramped up production and succeeded in growing its business, leading to the successful sale to Arlington Industries.
Andrew Lapping, Lead Investor and Chairman of DPE Automotive and also Partner at Hamilton Capital, said: "DPE Automotive has proved to be a superb investment and is a great example of the strength and excellence of the North East's manufacturing and automotive supply sector.
"When I made the initial investment, I had great confidence in the ability and aptitude of Peter and his team at DPE Automotive to grow the business and that confidence has certainly been repaid."
Rudi Wright, investor and director at DPE Automotive, said: "I am delighted with the performance of the company to date, the fact that 100 jobs were safeguarded due to the initial investment and to have been involved, however briefly, with a great North East success story."
Peter Coates, managing director at DPE Automotive, said: "There has been a real transformation in the business since the buy-out in May 2014. Investment in the business has enabled us to quickly expand capacity at the factory and to stabilize and grow the company. Arlington Industries is a major player within the supply chain in both the automotive and aerospace sectors, so DPE Automotive has a very promising future ahead of it."
The 2014 investment in DPE Automotive by the Finance for Business North East Angel Fund was the 100th investment made by the Fund, which invests in start-ups and existing businesses with growth potential in the region.
Dr Michael Dickens, fund manager at Rivers Capital Partners, which manages the Finance for Business North East Angel Fund, said: "We are delighted at the successful sale of DPE Automotive, which has brought up a major milestone for the Fund.
"Not only was DPE the Fund's 100th investment but this is the Fund's first major exit to date and has resulted in a substantial return on the original investment.
"The fact that DPE Automotive has been sold so quickly after the MBO that concluded back in 2014 is a testament to the terrific work which Peter Coates and everyone at the company has put into the business and to the high quality of the products they make."
Law firm Ward Hadaway provided legal advice to Rivers Capital Partners on both the initial investment in DPE Automotive and on the sale of the company.
Imogen Holland, Corporate Partner at Ward Hadaway, who led the firm's team on both transactions, said: "Having advised Rivers Capital on the original investment in DPE Automotive, it is particularly pleasing to have also advised River on the successful sale of the company.
"We are delighted that this has resulted in a substantial return for the Finance for Business North East Angel Fund and we wish all at DPE Automotive the very best for the future under their new owners."
Ward Hadaway has previously advised Rivers Capital Partners on over 35 investments from the Finance for Business North East Angel Fund.
The Fund forms part of the Finance for Business North East investment fund established to provide debt and equity funding to SMEs based in North East England.
The return on the original investment in DPE Automotive by the Finance for Business North East Angel Fund will be used towards repaying the European Investment Bank loan which established the Finance for Business North East Fund.
Senior associate Marie-Louise Bozonet led the Square One Law team that advised DPE Automotive on the MBO and sale of the business.
She commented: “It was a pleasure to work with the DPE team and Rivers Capital Partners again. It is a fantastic return and testament to the DPE team to have completed a management buy-out and then a successful sale in just over 12 months and we are delighted to have supported the team along the way. Arlington is a great fit for the business and will help DPE to expand as part of a larger group.”