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A Fife-based cabling group is back under Scottish ownership after its management bought the company from its US owner.

Brand-Rex was acquired by a team led by chief executive Paul Lines, who bought the company from private equity firm the Gores Group for almost £30 million.

The buy-out was backed by Edinburgh-based private equity firm Murray Capital, formerly Charlotte Capital, in what is its largest investment to date. The firm, which is the private equity arm of Murray International Holdings, is headed by David Murray.

Lines said the deal gives the company the funding needed for growth. “Murray Capital was keen to bring ownership of the company back to Scotland and of course saw Brand-Rex as a good investment opportunity.

“It was also highly impressed with the turnaround in sales and profitability under our management,” he added. “Accordingly, we structured an acquisition that allowed management to be director-owners as well as operational directors, which will strengthen our focus on success even further.”

Murray Capital is backing Lines’ investment plan during the next three years, ensuring the company will be able to continue its growth and improve its manufacturing operations.

Murray said Brand-Rex has enormous potential. “Brand-Rex is already a global player in the highly sophisticated communications infrastructure and specialty cables markets and we believe that it has the management talent and resources to become the market leader.

“The strength of the management team at Brand-Rex and the fact they have presided over a steady rate of growth since restructuring the business in 2003 made this an attractive proposition,” he added. “We have structured the transaction in such a way that enabled the management team to take part ownership of the business – a factor which we believe will serve to drive the business forward faster and even more successfully.”

Murray Capital’s investment was complemented by £12.5 million of senior debt provided by Royal Bank of Scotland (RBS), which also supplied management with £5 million of working capital.

RBS’ funding was arranged by Richard Grant, a Corporate & Structured Finance director, who was supported by Jill Arnold and Susan Campbell.

“We supplied a funding package that not only helped management acquire the business but, importantly, provides working capital, which will fuel sustained growth of the business in the months and years to come,” Grant said.

“We are delighted to have supported this Scottish manufacturing business and to have completed our first deal with Murray Capital, with whom we look forward to working with again in the near future.”

Murray Capital appointed Scott Black, a director of FWB Consulting, to conduct a management due diligence (MDD) review of Brand-Rex’s buy-out team.

FWB’s team included director Guy Hughes and consultancy psychologist Elizabeth Anne Mulholland.

“FWB Consulting completed a thorough MDD exercise within two weeks, which included an appraisal of succession planning and the ability of the senior team to meet the aspirations laid out in the business plan,” Black said.

Brand-Rex supplies cabling systems to support IT networks across various sectors, such as finance and education. The company employs 390 staff at its sites in Fife, Lancashire and its global sales office network.

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