Case Studies

Experienced and proven turnaround investment professionals

• Compair

  

  CompAir is a long established manufacturer of air compressors which traces its roots back over 200 years.

  The business was formed by a series of acquisitions starting in the mid 1960s. By the mid 1980s CompAir was number 2 in the global compressor market, was well respected and highly profitable. The group was acquired by Siebe in 1984 and continued to prosper for a further decade.

  However a lack of investment from 1995 onwards and high management turnover resulted in market share being lost and sales beginning to slide.

  By 2000 the business was heavily loss making and was put up for sale by the then owners Invensys Plc. After two aborted sales processes they recruited Nick Sanders from the aerospace industry to lead a turnaround and then sale process.

  Shortly after Nick arrived in the business he met the Alchemy team, initially Robert Barnes, and a buy-out from Invensys was executed extremely rapidly. Having paid £1 for the business a further £36.5m was invested by Alchemy to fund the trading losses and a fundamental turnaround of the group.

  At the time of purchase sales were £190m and falling fast, and EBIT was a loss of £19m.

  The turnaround came in phases.

  • Firstly the cost cutting - four factories were closed in the first two years of the investment and the work transferred to other factories within the group.
  • Secondly, the management team was strengthened significantly. Clear targets were established and attractive incentive schemes were put in place.
  • Significant savings were made by fundamentally rethinking the sourcing strategy and utilising low cost sources in China and India wherever possible.
  • Investing in new technology that none of the competition had.
  • Investing in growing the profitable after market business and expansion into Eastern Europe.

  By 2006, excellent progress was being made and the business was voted Private Company Turnaround of the Year by the Society of Turnaround Professionals.

  By 2008, sales were up to £280m and EBIT up to £18m profit.

  After a highly competitive sales process the business was sold to a trade competitor for £205m in October 2008.

  4.1 x the original investment was returned to investors…a classic turnaround!

  
  

  Related content

  • View the CompAir website