A Deal Made in Sheffield with a Local Cast
January 1, 2021
A company which is a world leader in its field is poised for significant growth following a management buyout from the University of Sheffield, which has concluded alongside fundraising to take the company to its next phase of growth.
Castings Technology International Ltd (CTI) is a world-leading provider of manufacturing, technology, expertise and services to the cast metals sector and global supply chain. The company has completed a £2m fundraising, backed by Mercia Asset Management, via the Northern Powerhouse Investment Fund and Nucleus Commercial Finance, and at the same time has been ‘spun off’ into the ownership of the management team.
A spokesperson for the University of Sheffield said: “We would like to thank the employees and team at CTI for their dedication and support for the business over a number of years, as well as CTI’s customers and partners.
“We are delighted that this transaction will see the continuation of CTI’s operations under new ownership, securing the ongoing employment of 60 people locally in highly skilled jobs within the Sheffield City Region.
“Progressing to private ownership is a natural and welcome evolution, and the University has worked with the CTI management team to ensure as smooth a transition as possible.”
CTI has been perfecting its technology over many years, working hand in hand with multinational Blue-chip companies through both research and development and long-term supply agreements. CTI now forms a critical player in a supply chain servicing multi-billion-pound contracts.
The company has casting capabilities in almost any type of metal alloy and has a 1,200kg titanium vacuum melting capability, which ranks it as one of the largest in the world. In conjunction with customers’ design teams, CTI is casting complex components supplied into the aerospace, defence, chemical nuclear and marine markets.
The funding raised will allow the company to expand more rapidly by investment into further product development, alongside sales and marketing infrastructure and resource, to expand throughout its world-class manufacturing facility, which is based at the University of Sheffield Advanced Manufacturing Research Centre (AMRC).
Richard Cook, Managing Director, a highly experienced engineer, and local entrepreneur Kevin Parkin, Chairman, lead the management team. Kevin added that CTI will be telling the world that it is still ‘Made in Sheffield’.
Award-winning and Yorkshire-based deal making firm, Castle Square Corporate Finance, led by Managing Director Kevan Shaw and Director Steve Bell, provided advice on the transaction and ran a fundraising process which successfully delivered the £2m funding needed to support the growth plan.
Kevin Parkin said: “This is a unique opportunity to develop and grow this highly efficient manufacturing capability now that the equipment, processes and quality systems have been fully developed and accredited. Working alongside our AMRC neighbours, together with the superb research and development initiatives provided by the University, will give CTI an enviable position in the global supply chain. The facility will also allow the City Region to attract and retain highly skilled metallurgically based talent.”
Richard Cook added: “The operational management team of CTI intrinsically understand this business and are dedicated to continuing to serve our customers and to working with our fantastic team of experienced engineers. We are delighted to have the opportunity to take forward our plans for the company under our new ownership. The management team would like to place on record its sincere thanks to the University of Sheffield for its support and assistance during the transferral of the ownership of the company and its support for CTI over a number of years.”
Castle Square is an independent, specialist mid-market corporate finance boutique operating from offices in Sheffield and Leeds. Castle Square has a proven track record of successfully delivering corporate finances services on a wide range of clients based nationally and internationally.
Kevan Shaw added: “It was exciting to be involved in a transaction and fundraising that will see CTI embark on rapid growth, exploiting its market leading technology and world-class production facilities whilst creating highly skilled jobs, for the benefit of the Sheffield City region.”
Legal advice was provided to the management team by Sheffield lawyers, Wake Smith, led by John Baddeley, with Mark Cooper of accountancy firm BHP providing tax advice.
Wake Smith Chairman John Baddeley, who led the Wake Smith team which included commercial property Director Paul Gibbon, said: “We are delighted to have helped the MBO team which is providing expertise and products to a global supply chain and flying the flag for the region’s advanced manufacturing expertise. I am sure that they will build the business and expand their reach over the next few years.”
The Northern Powerhouse Investment Fund has provided a significant loan to CTI to support the growth business plan, with Andy Tyas and Pete Sorsby from the team at Mercia Asset Management leading on the transaction on behalf of the fund, with working capital facilities provided by Financial Institution, Nucleus Commercial Finance, led by Director Riana Azam.
Andy Tyas said: “CTI is a great example of the quality of the SME cohort situated in the Advanced Manufacturing Park and wider Sheffield City Region community. We are delighted to work with the company’s management team and its advisors in using Northern Powerhouse Investment Fund to support the business in its next phase of development, following the success of its University of Sheffield partnership that has brought it to this point. The expansion of its capability across a wide and high-quality customer base is an exciting prospect we look forward to supporting in the years to come.”
Dan Renton and his Corporate Finance team at Deloitte provided corporate finance advice to the University of Sheffield, and Roger Gough of DLA led the legal team acting on the University’s behalf.
Nucleus Commercial Finance were advised by lawyers at Gateley.
BHP will become the Company’s new auditor.