Barclays Private Equity sells Fosbel for £57 million

Barclays Private Equity, one of the most prolific mid-market private equity deal makers in Europe, has sold its investment in Fosbel to American Capital Strategies Ltd. (Nasdaq; ACAS), a US based buyout and mezzanine firm. The £57 million deal generated Barclays Private Equity a return of more than four times its original investment over a two year period.  

During the last 20 years, Fosbel has established itself as the global leader in the provision of ceramic welding maintenance and repair services to coke oven and glass furnace operators. The company pioneered ceramic welding technology for the repair of coke ovens at extreme temperatures, improved efficiency and extending the operational lives of coke batteries.  

Throughout their investment, Fosbel has performed strongly, increasing turnover from £23 million in 2002 to £48 million in the current year. Profits have seen a significant improvement, benefiting from a growing appetite for both steel and hence coke in the Chinese and other economies around the world. This has led to expansion of the company’s Chinese and Asia Pacific divisions as well as further penetration of the European and North American markets.  

Barclays Private Equity backed Fosbel’s management team in a £20 million buy-out in July 2003. Led by Derek Scott, CEO of Fosbel, the company was bought from its joint owners, Foseco and Glaverbel (a subsidiary of Asahi Glass in Japan).  

Phil Griesbach, Director of Barclays Private Equity, who led the deal said: "We are extremely pleased with the performance of Fosbel, which is a great example of a world-class service-led company. Management have grabbed the opportunity to grow this business with both hands and have delivered above expectations.  

Derek Scott, Group CEO for Fosbel, said: “The concept of Complete Battery Maintenance has been fully embraced by our customers, who understand the benefits of outsourcing all their battery maintenance needs. Barclays Private Equity’s knowledge of the support services sector, combined with the team’s clear views on the future of Fosbel, has ensured that we have been able to expand the company and exploit opportunities in both local markets and on a world-wide basis.”  

Fosbel is based in the West Midlands (UK), Cologne (Germany) and Cleveland (US) and has operations in Japan, China, Australia, India, South Africa and South America. Its clients include prominent steelmakers Mittal Steel,Arcelor,Posco, Mitsubishi, US Steel, A.K.Ashland Steel, major glass producers Pilkington Glass, Saint Gobain and Guardian and multi national oil companies, BP and Shell.