Insights / Equity funding accelerates growth for Northern Irish manufacturers

Equity funding accelerates growth for Northern Irish manufacturers

Manufacturing is making a comeback, according to Make UK. The body, which represents 20,000 companies across engineering, manufacturing and industrials, has stated that output volumes reported in the first quarter of this year were at the highest level since its research began 30 years ago, with growth almost twice as fast in 2021 as it had expected, due to a strong post-pandemic rebound.

Those keeping an eye on Northern Ireland might not have been as surprised by the rebound. That’s because, pre-pandemic, the advanced manufacturing and engineering sector in Northern Ireland had grown almost three times faster than the rest of the UK.

And despite the challenges faced over the last year and continued uncertainty surrounding Brexit, manufacturers in Northern Ireland have continued on their growth trajectory, with countless examples of companies which have not only demonstrated resilience and adaptability, but also an appetite for expansion.

Manufacturers grow by acquisition

Last year BGF made a £10 million investment in Lisburn-based Mzuri Group, a family-owned manufacturer of window coverings which most people locally know as Decora Blinds.

“Since taking on investment, the management team at Decora has acquired seven more businesses as part of an ambitious strategy to expand into the US and Europe,” says Stuart Dickson, managing director of Decora.

“Growth has continued with the recent acquisition of the TCMM Shutter Group, one of the largest interior wood shutter distributors in the UK.

“We have found it highly beneficial to have external shareholders to help structure the board for the next phase of growth. They provide knowledge and experience, which enables us to face upcoming challenges such as acquisitions or restructuring. BGF is also there to act as a sounding board for the directors, to help discuss hurdles, challenge plans and provide strategic direction.”

Fast-changing sector

As companies emerge from the pandemic, they are beginning to see the results of the strategic decisions manufacturers have taken to better position themselves to achieve their growth potential. Businesses within the BGF portfolio quickly adapted by taking steps such as altering shift patterns and, in some cases, due to the nature of their operations, facilities have been expanded to ensure all employees are able to socially distance and feel safe at work as well as creating capacity to grow.

In 2019, Antrim-based kitchen, door and component supplier Uform secured a multimillion-pound funding package from BGF and Ulster Bank (pictured: furniture designed by Uform). The company was able to double the size of operations and install state-of-the-art paint lines to increase productivity and product range.

“Having taken on the investment and expanded operations, Uform was able to grow our workforce during the pandemic and enhance its in-house technology capability to meet increased demand,” says Eamon Donnelly, managing director of Uform.

“In a fast-changing sector which is very attuned to the performance of the economy, the support of BGF and its network has already proved valuable. We’re extremely proud of the operation we’ve built from the ground up. BGF understands that, and their presence on our board has played a vital strategic role in our recent expansion. We have invested significantly to pave the way for future growth.”

Mechanism for growth

Now, manufacturers are facing the challenge of rebuilding their balance sheets and investment in working capital will be key to growth. As companies begin addressing their capital structure, preparing to take on investment should not be off the table.

Although it can seem daunting introducing an equity investor into a business, BGF aims to overcome any concerns through our approach to investing and our track record of successfully investing in and working with successful Northern Irish companies.

BGF takes a minority stake in the companies it invests in, supporting and working alongside management teams and shareholders.

“We trust management teams to run the day-to-day operational matters – our role is to offer strategic input and leverage the power of our network to help drive growth, create value and ultimately help pursue an exit that is timed right to be of maximum benefit to all shareholders,” says Paddy Graham, head of the Central Scotland and Northern Ireland team at BGF.

“We now have seven investments in Northern Ireland which we are working with in this manner – all successfully growing and building value. Importantly, we have fostered strong working relationships with our management teams, which hopefully makes the growth journey more fun and enjoyable for all involved.”

Whether you supply machinery to the energy sector, equipment to the construction industry, or high-precision components for defence, your business has the potential for growth. BGF can help put you in pole position.

“Manufacturers in Northern Ireland are in one of the best-positioned sectors to take advantage of equity investment.”

 

A Northern Irish maker of blinds and shutters expands via targeted M&A

BGF's investment has helped Decora to invest in product development and equipment, pursue strategic acquisitions and expand across Europe.

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