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Management Buyout secured with the help of SYIF

Published: 27th October 2003

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From left: Peter Hoy, general manager of Macalloy, John McCarten from UK Steel Enterprise, Allan Wood, the Investment Manager who led the deal.

Sheffield Steel company, Macalloy, set to enter US markets

South Yorkshire Investment Fund has helped a management team buyout one of Sheffield's most established steel companies.

In a deal, also backed by UK Steel Enterprise, the Fund has provided a £ 100,000 loan for the management buyout of Macalloy, based on Hawke Street.

Founded in 1921 and formally known as McCalls Special Products Ltd, the company has been at the forefront of steel bar technology. In 1948 it pioneered the development of the Macalloy steel bar for the then rapidly growing reinforced concrete market, a bar which is widely accepted to this day as the industry standard.

General Manager, Peter Hoy, led the buyout and is planning to take the company into the US construction market - thanks to the funds made available by SYIF.

He said: "We want to grow the company from our well established base with new products and new markets. SYIF were extremely helpful and they have given us the added confidence to drive the business forward."

Employing 60 people the company is a former winner of the Queens Award for Export - exporting to over 50 countries.

Macalloy Tensioning Systems - made with special high strength, hi-tech engineering steels manufactured by Corus in South Yorkshire - are accepted as standard by architects, engineers and contractors around the globe. Most of the world's recent airport developments - including Changi Airport Singapore, Barajas Airport, Madrid and Ben Gurion
Airport, Israel and Munich Airport - have Macalloy bar products supporting the roof or glass walling.

Closer to home their tensioning products support the roof of Don Valley Stadium and the Commercial Street Bridge in Sheffield designed to carry the Supertram. Their work also includes the Manchester Stadium built for the Commonwealth Games, and the Hungerford Bridge Millennium project opened to the public last year which has already won a number of design awards.

The management team was advised by Kevin Gregory of Hawsons Corporate Finance accountants in Sheffield. In addition to SYIF's loan finance was also provided by the Bank of Scotland team with equity finance provided by UK Steel Enterprise.

Allan Wood, Investment Manager who led the deal, said: "We were very impressed by Macalloy. They are a well organised and profitable company with strong technical know-how. Their products, which are well established, are used in some very exciting projects across the world."

Tony Goulbourn, Chief Executive of South Yorkshire Investment Fund Ltd, said: "It is always good to be able to support traditional Industries which have developed over the years through innovation and increased technology. Macalloy's management are extremely focused and the Fund is confident they will continue to be market leaders in their field."

The Fund provides development and risk capital ranging from £15k to £1m to businesses in, or prepared to relocate to, South Yorkshire.

It offers two key products, one of which is loans ranging from £15k to £ 150k with effective annual interest rates from as little as 3% per annum. The second product is an equity-linked package, ranging from £50k to £1m where the Fund takes a minority stake in the business.

A unique feature of the way the Fund can help businesses is the Mentorbank project, which provides subsidised mentoring support to help management teams grow the business more profitably.

Editor's Notes

About South Yorkshire Investment Fund

South Yorkshire Investment Fund  provided seedcorn, loan and equity linked investments, ranging from £15k to £2.5m, specifically to help small and medium businesses meet the gaps in funding they need for growth and development.

Created as part of the Objective 1 programme, the Fund is a private and public sector business finance provider. The European Regional Development Fund and Yorkshire Forward are investors in the Fund.

South Yorkshire Investment Fund also provided access to Business Angel investments from the Yorkshire Association of Business Angels and Microloans through BiG Business Loan Fund and Donbac Microloan Fund.

Finance Yorkshire has now taken on responsibility for providing gap finance in Yorkshire and the Humber.
http://www.finance-yorkshire.com

For further details please contact Suzanne Tinkler,  on 0845 649 0000.

South Yorkshire Investment Fund Ltd is a company limited by guarantee (Registered No 3936065). South Yorkshire Investment Fund comprises three sub funds, the South Yorkshire Investment Capital Fund, the South Yorkshire Investment Development Fund, which are each managed by YFM Venture Finance Limited, and the South Yorkshire Investment Small Business Fund, which is managed by Finance South Yorkshire Ltd. YFM Venture Finance Limited (Tel 0113 294 5000) and Finance South Yorkshire Ltd (Tel 01709 386 377) are each authorised and regulated by the Financial Services Authority. South Yorkshire Investment Fund also provides a number of services, which are not regulated by The Financial Services Authority. These include the pilot Seedcorn Fund, BiG Business Loan Fund, Mentorbank and access to the Donbac Microloan Fund. BiG Business Loan Fund is managed by Donbac Ltd (company registration No. 01925556) and Key Fund Yorkshire Ltd (Tel 0114 242 8900).