Arbuthnot Commercial ABL supports Ignite Growth’s acquisition of Newcastle Tool & Gauge

By Bridging Loan Directory 4th March 2021

Arbuthnot Commercial Asset Based Lending has structured and delivered an asset-based lending (“ABL”), and cash flow funding package to support the acquisition of Newcastle Tool & Gauge Ltd (“NTG”) by Ignite Growth (“Ignite”).

Ignite is a UK-based investor focused on supporting the growth of ambitious and fast-growing companies. The financial terms of the transaction are undisclosed.

Headquartered in Gateshead and founded in 1979, NTG is a precision engineering business that manufactures low volume, high value parts for use in Severe Duty Engineering Applications, that sees products operate in high temperature, high pressure or high stress environments.

Its customers originate from a diverse set of markets, including oil and gas, food packaging, subsea, power generation and defence.

The acquisition by Ignite represents the first stage in its buy-and-build strategy in the sector.

Prior to the acquisition, NTG had three equal shareholders who have owned and managed the business since 2008.

The funding has enabled two of the shareholders to retire and one to remain as a significant shareholder of the business, having also taken on the role of operations director.

Commenting on the acquisition, Forbes Stuart, Partner at Ignite Growth, said:

“This transaction has enabled us to secure a very exciting investment in Newcastle Tool & Gauge.

NTG is a resilient and growing business that has built an excellent reputation for high quality over the years, delivered by a dedicated and loyal workforce.

The team at Arbuthnot Commercial ABL was quick and responsive, providing a smooth and straightforward funding process.

We look forward to working with Arbuthnot Commercial ABL as a key funding partner as we identify further acquisition opportunities over the next 12 to 18 months.”

Andrew Rutherford, Commercial Director at Arbuthnot Commercial ABL, said:

“Ignite choosing us to support their acquisition of NTG is a testament to our relationship-led approach as an asset-based lender.

We’ll continue to work with the team as they pursue exciting, new opportunities for complementary acquisitions as well as organic growth.

With over 2,000 precision engineering businesses in the UK, many of which are owned by managers looking to retire over the next 5 years, the potential for the group to extend its market reach through a flexible ABL-funded buy-and-build programme is significant.”