YFM Equity books 5.7x return on UK manufacturer

The divestment comes as the firm is launching a new fund targeting £100m to £150m for investments in the UK.

YFM Equity Partners has made a 5.7x return on its investment in Winder Power, a UK-based manufacturer of power distribution equipment, as it seeks to divest a collection of regional funds.

The firm sold Winder Power for £6 million to a management team backed by Enterprise Ventures, a growth capital fund manager, according to a statement. The chairman of the company also sold his stake in the business.

Winder Power, which is based in Pudsey, near Leeds, has two business divisions. Winder Electrical specialises in the design and manufacture of power and distribution transformers for use on electricity networks. Newton Derby supplies equipment for sectors including marine, rail and aviation. Northern Ireland Electricity, Electricity North West, GE Energy and Ineos Chemicals are among its customers.

YFM Equity Partners, which acquired the business in 2005, did two things. “We relocated the business to a more modern and better equipped factory and on the back of that it was able to widen its product range to ensure it could offer some export products as well,” David Hall, managing director, told Private Equity International.

The firm, which was established in 1982, has five regional offices and typically invests up to £10 million in fast growing businesses in the UK. It works alongside management teams to “create transformational growth and success”, according to its website. The firm manages several funds, including venture capital vehicles and regional-specific funds.

“YFM grew up investing in each region and that’s how we built our regional presence over the years. For the last seven years, we have raised funds that invest across the UK. We don’t invest in regional funds anymore but we are still managing out portfolios of those funds,” Hall said, adding that it will divest those small funds in the next couple years. In June, the firm exited Metronet, an Internet provider, making a 5.5x return, according to the statement.

The firm is launching a fund which will be targeting £100 million to £150 million, Hall said. That fund will do deals between £3 million to £10 million in the UK, he added. “We have a number of existing LPs who backed us in different funds over the years and we hope that is going to form the cornerstone,” he said.

Senti Corporate Finance and Cavendish Corporate Finance advised YFM Equity Partners on the exit. Irwin Mitchell provided legal advice.