YFM

Location - Sheffield
Sector - Industrial Products
Type - Aim

"Without the backing of YFM, Pressure Technologies would not be where it is today. In 2004 our manufacturing business, Chesterfield Special Cylinders, had been facing closure due to the imminent loss of its factory to developers. The funding offered by YFM was crucial to our Bankers' decision to back an MBO and also helped provide sufficient cash to relocate and expand the business. Thanks to this timely intervention we relocated to Sheffield in 2005, floated on AIM in 2007 and have enjoyed significant year on year growth over the last four years. A business that nearly closed in 2004 now has a market capitalisation of over £30 million" John Hayward, Pressure Technologies

YFM met Chesterfield Cylinders in 2003, along with the management team an aggressive offer to purchase the business from its German owners was put forward. The company changed its name to Pressure Technologies.

Following the successful MBO YFM strengthened the management team. In order to improve capability and increase capacity YFM assisted in sourcing new premises for the factory as well as applying for relocation and equipment grants. The new management put in place a successful sales strategy which saw sales rocket from £3.2m pa to £12m.

As a result of rapid sales growth, a growing order book and the identification of a number of potential acquisitions YFM advised the management that an AIM Flotation may provide the best route to additional capital required for further growth.

The company ultimately floated on AIM 6th June 2007 at a market capitalisation of £17M and was 3X oversubscribed. The demand was such that the fund was able to sell 80% of its holding on day one. At the floatation price of £1.50 the total fund return was 125% IRR. The company commenced trading on day one at a premium of 17%.

John Hayward, Chief Executive of Pressure Technologies “we are delighted the float has gone so well and we have achieved our funding requirements, giving us the financial platform to fund our aggressive growth and development objectives. The help from Mark and YFM Group in initially backing our MBO was invaluable in helping us get to where we are today.”

Key points

• The relocation and improvement to production facilities was ultimately completed with the assistance of the Fund and its resources on time and under budget.
• The Funds role in the marketing and development strategies helped the company expand into the lucrative oil and power sectors.The Fund assisted the company in identifying vertical and horizontal integration opportunities increasing turnover and diversifying against sector risk.
• In addition the Fund assisted in identifying acquisition targets
• The business would have been closed and 37 jobs would have been lost if the deal had not taken place.