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Case Study

Leumi ABL’s £33 million facility and Mutares’ strategic vision lead to award-winning £144 million sale

Posted: 20th June 2024   |   Share

Special Melted Products

Leumi ABL is proud to have supported Mutares’ award-winning turnaround of Sheffield’s Special Melted Products by providing a £33 million working capital facility. Leumi ABL played a key role in the strategic and financial efforts that culminated in the sale of the business for £144 million, almost a year after an acquisition for just £2.5 million.

The successful transformation garnered industry-wide recognition and highlighted the remarkable turnaround achieved through Mutares’ strategic vision and operational expertise alongside crucial financial support from Leumi ABL. The partnership earned Mutares the prestigious Actum award for the best private equity deal of the year in the £100-500 million category.

In late 2021, Mutares, a private equity firm known for turning around underperforming companies, began investigating metals production business Special Melted Products, owned at the time by Pittsburgh headquartered ATI.

Special Melted Products had a storied history on a steel production site dating back to the Victorian era but had struggled financially under ATI's ownership. Its poor performance and significant pension liabilities made it unattractive to other potential buyers.

Despite these challenges, Mutares recognised the potential for operational improvements and saw its committed workforce as a valuable asset. They acquired the business for £2.5 million in early 2022.

Upon acquiring the business, Mutares delivered a strategic pivot. There was strong demand for its products in the oil and gas market and the growth achieved funded significant expansion into the aeronautics industry which operates with higher margins driving improved EBITDA multiples.

This shift eventually resulted in a dramatic increase in sales, from under £50 million to £120 million. The business has a long cash cycle: therefore, to fund the sales expansion, Mutares needed to secure additional working capital for Special Melted Products.

This is where Leumi ABL stepped in. Leumi ABL provided a £33 million facility (£28 million against receivables and £5 million against inventory) despite the company being at a very early stage in its growth strategy, showcasing its commitment and understanding of the business and Mutares’ turnaround plans.

Ryan Whitworth, Regional Sales Director at Leumi ABL says: “We were an active financier and supporter who understood the company's potential and we were willing to back it substantially based on the plans Mutares presented, even though those ambitions were not yet being reflected in the actual or historical performance of the business. Being able to get under the skin of a business and understand what our partners are trying to achieve is fundamental to how we look to support and help firms.”

Thomas Cullis, Mutares Operating Partner said: “Leumi ABL’s ability to quickly understand the complexities of our business and provide a scalable, flexible finance facility was crucial to our success. Leumi’s support went beyond just financial backing; their strategic insights and swift execution enabled us to implement critical operational improvements and achieve remarkable growth. We look forward to continued collaboration with Leumi as we drive further value in our investments."