Castor manufacturer backed by PHD Industrial Holdings makes first acquisition

April 11th, 2024

A castor and wheel manufacturer backed by PHD Industrial Holdings has acquired a distributor in a deal that will create the largest group of its type in the UK.

The acquisition of Varley Castors of Altrincham is the first by Wiltshire-based BIL Group, and was backed by a £4.5m finance package from Arbuthnot Commercial Asset Based Lending which also includes funding for further growth and acquisitions.

Varley, a third-generation family business founded in 1938, employs 16 staff in Altrincham and its branch in Shropshire and supplies original equipment manufacturers and resellers nationwide. The deal will allow for the eventual retirement of Andrew Spring and Tim Batten, though they will remain in their role as joint Managing Directors and continue to lead its growth with the support of the BIL and PHD teams.

BIL Group manufactures castors and wheels for a wide variety of industries and materials handling equipment used by delivery drivers and in warehousing operations. The company, which employs over 40 staff and boasts its own branded range of products, was acquired by PHD Industrial Holdings in 2022.

Since then, it has attained a number of key quality standards and consolidated its three Wiltshire warehouses into two, one of which is a newly-refurbished unit. BIL increased turnover by 16% to a record high of £8.9m in the last financial year to September 2023 and profits rose by 13%.

Andrew Spring of Varley Castors said: “Joining forces with BIL brings together two like-minded companies with shared values and a combined trading history of over 130 years. The alliance will provide long-term benefits for our clients. We look forward to working with BIL to enable both businesses to take advantage of the opportunities ahead.”

Timothy Murrow, Managing Director of BIL, added: “This first acquisition is a pivotal moment for BIL and is part of our long-term growth strategy, which is fully supported by PHD. Currently both businesses supply different products and serve different customers. The deal will broaden our product range and give Varley access to our extensive range of materials handling equipment, which will open up new sales channels for both sides.”

PHD Industrial Holdings, which is based in Daresbury, operates a ‘corporate compounder’ model which, unlike private equity, enables it to invest for long-term growth without having to sell businesses every few years to return funds to investors. BIL Group is one of six trading businesses in its portfolio which between them have a combined turnover of over £60m.

Philip Price of PHD said: “BIL was already the leading UK-based manufacturer of castors and wheels, but the addition of Varley makes it the largest UK-based distributor too. Since acquiring the business two years ago, we have worked with management to prepare it for growth. The deal shows the benefits of our investment model, which enables us to support traditional businesses like BIL and help them achieve long-term, sustainable growth.”

Joe Taviner led the deal on behalf of Arbuthnot Commercial Asset Based Lending. Catriona Lang and Declan Littler of Dow Schofield Watts’ Transaction Services team provided financial due diligence for BIL Group while Dave Waddington of DSW Tax Advisory provided tax advice and Jonathan Robinson, Rosie Spencer and Anthea Nelson from DWF provided legal advice.

Ian Gillis, Harriet Adgie and Daniel McDonagh of Hill Dickinson provided legal advice to Varley.

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