Dunedin navigates £32m exit

UK-based private equity firm Dunedin has sold aircraft navigational aid manufacturer Fernau Avionics for £32 million two years after it acquired the firm.

Dunedin Capital Partners has sold Fernau Avionics, a maker of navigational equipment for aeroplanes, to Moog Controls, a UK-based aviation control system provider, for £32 million (€36 million; $45 million). 

Dunedin originally invested £8 million into the firm in a £16 million management buyout in May 2007.

Founded in 1970, Fernau has sold more than 1000 navigational systems worldwide and 90 percent of UK airports use its distance measuring equipment.

Two Dunedin partners were appointed as directors to the 80-employee strong firm, which is situated in Luton, South-East England. Employment numbers have grown by 20 percent and production facilities have increased by 30 percent since the buyout, the firm said.

The implementation of a growth strategy by Dunedin, with a focus on cash generation and working capital management, enabled Fernau to repay its buyout debt ahead of schedule, Kevin Kearns, managing director at Fernau, said in a statement.

Fernau’s sales have doubled in a year from £10 million to an expected £20 million for 2008, according to Brian Scouler, a director of Dunedin and former Fernau board member.

“We bought the business well. The previous owners had run the auction process but they had kept some interested parties out of it. Shortly after we acquired the busines Moog approached us, but we felt there were still things we wanted to do with the business so we declined,” Scouler, said in an interview.

“We spent a lot of time growing the business. We then brought in an external company to do a strategic review and they confirmed that it was not a bad time to be looking at Moog. We approached them with an offer of exclusivity if they were prepared to offer us an attractive price and they did,” he added.

Dunedin, which targets deals of between £10 million and £75 million, has made four new investments in the past two years, including Fernau, trust manager Hawksford International-formerly Rathbone-, specialist manufacturer Formaplex and corporate service provider Enrich. It raised a £250 million buyout fund in 2006 and has more than £500 million under management.