Yorkshire Bank backs acquisition of Synseal Extrusions

Synseal Extrusions Limited, the UK’s leading supplier of PVC-U windows, doors and conservatories, has been acquired by private equity house H.I.G. Europe with debt funding from Yorkshire Bank.

The deal sees the management team led by chief executive officer David Leng take a significant equity stake in the business. It also provides an exit for the founder Gary Dutton MBE, who will be retiring from the business to pursue his hobbies following a two-year wind down.

Synseal is the UK’s market leader in providing extrusions for the windows, doors and conservatory market. Currently one in eight windows and one in four conservatory roofs installed in the UK utilise Synseal products.

Operating from a 34-acre manufacturing facility in Sutton in Ashfield, Nottinghamshire, Synseal employs over 500 people. Turnover for the year ending March 2009 was £76.3m.

Synseal was founded in 1980 as a ‘direct sell and fit’ PVC-u window operation, opening 13 showrooms across the East Midlands. By 1981 it started fabricating its own range of windows and in 1985 opened a trade division selling to local tradesmen. By the early 1990’s this achieved nationwide coverage.

Further developments including new extrusion lines and extending the range to include an integrated conservatory roof system led to the company being recognised as the largest extruder of profile systems in the UK, and subsequently as the market leader in the conservatories market.

Synseal has historically sold the majority of its products into the domestic replacement market but recent product launches have opened up opportunities in the new build and social housing sectors.

Synseal has the largest customer base in the industry and is underpinned by a multi-brand strategy. The company has continued to outperform in the market with sales level increasing despite the economic environment.

The debt package, led by Yorkshire Bank and including mezzanine debt from Noonday Asset Management, will enable H.I.G. to support Synseal’s continuing improvement programme as well as its organic and acquisitive growth plans.

The Yorkshire Bank team was led by area director, Ian Howey with Martin Poole, and Dan Salt. Ian Howey commented: “Gary Dutton has built up an impressive and market leading business. The strong MBO team are highly regarded and have significant industry experience which gives them a platform to take the business to the next level.”

H.I.G. Europe is the European affiliate of H.I.G. Capital. H.I.G. managing director Paul Canning commented: “We are very pleased to announce our investment in Synseal, a best in class business led by an excellent management team. We believe that with the resources we bring coupled with this team, Synseal is well placed to drive consolidation in the market and to harness its position as a leading supplier in the UK.”

H.I.G. and the management team were advised by DLA in London (David Raff). Yorkshire Bank was advised by Eversheds (Stephen Kitts and Patrick Davis) with Linklaters advising Noonday Asset Management and Gavin Cummings of Browne Jacobson advising the vendor.

Advising the MBO team was Catalyst Corporate Finance (Keith Pickering and Leigh Daveran) with Clearwater Corporate Finance (Phil Burns) advising Gary Dutton.

PwC in the Midlands undertook financial due diligence (Russell Worrall and Matthew Tombs) with commercial due diligence undertaken by CiL (Sebastian Chambers).