03.10.2005

SGB exit alloy towers and ladder production

SGB has sold its Youngman business to a four-strong management team. Youngman is one of the top three producers of alloy scaffold towers worldwide as well as the UK’s leading supplier of ladders. The business had revenues last year in the region of £37 million.

The management buy-in /buy-out team is led by Paul Bentley, previously managing director of Ruberoid Building Products he assumes the position of Managing director of the new business, He is joined by Chris Owen, formerly Director of Pro-tec Windows UK, the incumbent managing director, John Bungay and financial director Jerry Stapleton. The new venture will trade as the Youngman Group Ltd.
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The Youngman stand at the recent APEX show, gave a clue of the impending sale, with its absence of the SGB logo.

The deal has been financed by Matrix Private Equity Partners and HSBC and the management team advised by Grant Thornton Corporate Finance, Cambridge.

Youngman is based at a plant in Maldon, Essex and incorporates the previously well known brands of Stephens & Carter/Climalloy, Zig-Zag and Martin Thomas/Hi-Way.

Youngman’s Boss towers the biggest selling brand in the UK, thanks to SGBs rental operation and a strong base with major tool hire companies such as HSS and Hewden. Sales overseas are patchy, being strongest where SGB has an operation.

Announcing the acquisition Paul Bentley, , said “This purchase represents an exciting opportunity for the Youngman business as well as the management team. It will bring benefits to our customers and to our employees, strengthening and energising the business, and building upon Youngman’s reputation for providing its customers with high quality products and service.”

The SGB Group and its owner, the Harsco Corporation, has been steadily exiting the manufacturing business to concentrate on rental services and the development of contracting and formwork operations.

The group recently purchased the rental and services business of Hünnebeck in Germany and SGB is understood to be planning a major expansion of its powered access rental business in both the UK and Holland.

Vertikal Comment

This deal had been rumoured from a while, but given the fact that strong margins can be made in the alloy tower business it is a surprise that a trade buyer was not successful.

The deal will be good for Youngman, in that it eliminates the conflict of being both a selling and a rental company. SGB has possibly seen its tower rental business fall off in recent years as the big tool hire companies take over an increasing slice this business. So that the tower and ladder manufacturing business would have been looking increasingly like a distraction to its main business operations.

SGB might also have been concerned about ladder sales in light of the new work at height regulations. However the Alloy tower business is performing well for most producers with companies like UpRight running at record levels of tower production.

The key to how well the new Youngman business performs will depend on its ability to hold on to customers like HSS and Speedy while building a stronger overseas distribution network.