Acquisition of CovPress

The Industrial Products team at Transcend Corporate led by Ian Curtis has advised major Chinese automotive supplier, Shandong Yongtai Chemical Group Company Limited (“Yongtai”) and TIA (GB) Limited, which trades as “Treadsetters”, on the acquisition of Covpress International Holdings Limited (“Covpress”). According to the Birmingham Post the deal value is £30m.

Covpress, with a history stretching back 123 years, manufactures body panels for many of the leading global automotive producers, including Jaguar Land Rover, Nissan and Renault. It is also a major supplier of the new generation of gas meters for the European market and it makes specialist exhaust systems for Caterpillar equipment. The company employs 454 people at its plant in Canley, Coventry, and reported annual sales of £67 million in the year ended 31 December 2012.

The deal is seen as a major inward investment in the UK’s re-emerging manufacturing sector.

The acquisition, which was originated and brokered by Transcend Corporate, was funded through a combination of equity provided by Yongtai and Treadsetters, and debt, arranged by Transcend Corporate’s debt advisory specialist Phil Rouse, from the asset backed finance division of ABN AMRO and Chinese Bank of Communications.

Yongtai, formed in 1996, is based in northern China with annual sales of around £2.7 billion and total assets of over £650 million. Yongtai Managing Director You Xiaoming said “The achievements of Covpress have been very significant, underpinned by global quality standards and ‘lean’ manufacturing techniques. We are very optimistic about the future of the business. We are the equivalent of Michelin in China, sell to more than 30 countries and supply the World Rally Championships and believe that this deal represents two strong companies joining together in a win-win situation”.

Treadsetters Chairman Peter Smith, whose company is based in Telford, commented “Business analysts and politicians are always talking about the need for inward investment and this is a shining example. Our Chinese partners were looking for a link with Coventry’s legendary history in the automotive sector and this alliance fits the bill to a tee. The involvement of Treadsetters means that Covpress remains essentially a British company. We can take advantage of investment from the fastest growing economy in the world and our Chinese colleagues will learn from the rich automotive expertise here in the West Midlands. This is a massive sea change for Covpress. It will help cement relationships for our customers General Motors and Jaguar Land Rover and create further opportunities in China. Transcend Corporate did an outstanding job brokering, structuring, negotiating and executing this transaction and we could not have achieved such a successful outcome without them”.

Commenting on the deal Transcend Corporate Director, Ian Curtis, said “Transcend Corporate is delighted to be able support an important automotive supplier such as CovPress as it seeks to meet the needs of its rapidly developing supply chain. Our clients Yongtai and Sunday Times FastTrak 100 participant, Treadsetters worked together in an impressive China:UK joint venture to secure this opportunity”.