HSBC Private Equity backs secondary buy-out of Britton Group in £77 million transaction


Britton Group, one of the largest extrusion and plastic packaging manufacturers in Europe, has undergone a £77 million secondary buy-out backed by HSBC Private Equity and HSBC Bank plc. The deal, supporting existing management, provides for future expansion through organic and capital expenditure-led growth.
Clearwater Corporate Finance advised on the transaction which also sees the exit of mid-market private equity firm LDC, which backed a £42 million management buy-out in 2004.
Britton Group, based in Winsford, Cheshire, is one of the top 20 flexible packaging businesses in Europe, producing 80,000 tonnes of plastic film and converted products each year. Its products, which are supplied to a diverse blue chip client base, include bags for fresh food produce and mail order goods, shrink wrap for multi-packs of food and drink and packaging for the medical, banking, hygiene and construction sectors.
The company has three divisions, Britton Taco in Winsford in Cheshire, Britton Merlin in Louth, Lincolnshire and Britton Decoflex in Hartlepool, which between them employ 657 staff.
The existing management team, led by chief executive Mike Clark who acquired the business with LDC backing in 2004, will remain in place and will retain a very significant financial investment in the group going forward following the latest deal. John Durston and Allen Mawby – former deputy CEO and CFO respectively of Amcor Flexibles – have joined the board as chairman and non executive director respectively.
Mike Clark, said: “We are very pleased to have HSBC as our partner in the development of Britton’s business and are confident that this partnership will enable the management team to further enhance Britton’s market leading position with capital expenditure-led, and organic growth.”
Mark Freer, director at LDC, added: “since our investment, Britton has continued to enhance its position in the European packaging market and its success is based on the entrepreneurial spirit engrained in the business. We have thoroughly enjoyed working with a strong and committed management team that will continue to drive growth in this next stage of the company’s development.”
Jon Hustler of Clearwater’s Birmingham office, which also advised on the original acquisition by LDC, said: “Britton Group is a first-class well managed business with plenty of scope for further growth. There are defined acquisition opportunities which would increase Britton’s presence in Europe, enabling it to further leverage its blue-chip client base and benefit from synergies and technology transfer.”
This deal confirms the continuing love affair between plastics packaging businesses and private equity firms. Around 14 of Europe’s top 50 plastics packaging companies are now in private equity ownership, compared to just one five years ago.
Mahmoud Atalla, head of HSBC Private Equity (UK), led the deal for HSBC Private Equity, assisted by Simon Rowan. HSBC Leveraged Finance in Birmingham (Graham Young and Sharon Hill) arranged and underwrote the senior and mezzanine debt financing package. Mahmoud Atalla joins the board of Britton.
Mahmoud Atalla commented: “We are delighted to be supporting CEO, Mike Clark and his team in the buyout of Britton. Britton is one of the largest and most successful packaging companies in the UK and Europe, providing high quality, innovative products with a renowned level of customer service, and we look forward to supporting the team in the further growth of the business. This deal has been completed in partnership with our colleagues in HSBC Leveraged Finance”.