Arbuthnot Commercial ABL supports leading castor manufacturer to make its first acquisition

The comprehensive funding package, consisting of a revolving accounts receivable line, inventory loan, and cashflow loan, not only helped to facilitate the current acquisition but also provided a significant uplift to BIL Group's headroom to enable future acquisitions and growth.

Already established as the leading UK-based manufacturer of castors and wheels, the addition of Varley to BIL Group will now make it the largest UK-based distributor. This landmark transaction is BIL's first acquisition and signifies its long-term growth strategy, which is backed by PHD Industrial Holdings, the corporate compounder based in Daresbury, Cheshire.

Varley, a third-generation family business founded in 1938, currently 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 BIL Group's growth with the support of both 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.

PHD Industrial Holdings operates a 'corporate compounder' model, enabling the company 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.

Peter Horton, Acquisitions Manager at PHD Industrial Holdings Ltd, said:

“We chose Arbuthnot Commercial ABL to support the deal, recognising that flexibility to deliver on this and further acquisitions was essential to our growth plan. With a strong rapport already established with the team, Arbuthnot was the natural choice to partner with on the transaction. Direct access to their team allowed for open discussions and pragmatic solutions. Their mindset of 'Let’s just get it done' helped the deal flow. Arbuthnot’s relationship manager guided both the BIL and Varley teams on the process and systems, ensuring a smooth transition.”

Timothy Murrow, Managing Director of BIL, said:

“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. The team at Arbuthnot Commercial ABL was fantastic to work with. Their approach was down-to-earth, and they swiftly tailored a comprehensive package that perfectly aligns with our future aspirations, encompassing both growth and acquisitions.”

Andrew Rutherford, Commercial Director at Arbuthnot Commercial ABL, said:

“We would like to extend our congratulations to all involved in this highly synergistic transaction. We are thrilled to have supported BIL Group's inaugural acquisition. This transaction unlocks significant cross-selling potential while broadening BIL’s reach, signifying a significant milestone for the business. We take pride in structuring transactions, not only to fund the initial acquisition but also to provide the maximum headroom to enable future organic and inorganic growth.”

Dow Schofield Watts’ Transaction Services team provided financial due diligence for BIL Group, while DSW Tax Advisory provided tax advice and DWF provided legal advice. Varley was advised by Hill Dickinson

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