WFEL acquired by KMW
WFEL - originally founded as the Fairey Aviation Company in 1915 - is the world’s leading manufacturer of bridging systems. Its range of lightweight, rapid-deployment bridges are used by 40 armed forces worldwide.
Munich-based KMW, which has operations in Brazil, Greece, the Netherlands, Mexico, Singapore, the USA and Turkey, specialises in the design and manufacturing of tracked and wheeled military vehicles. Its portfolio includes air-transportable wheeled vehicles, reconnaissance, anti-aircraft and artillery systems as well as the world renowned Leopard main battle tank, infantry fighting vehicles and bridge-laying systems. It has annual sales of in excess of €930 million and employs over 3,200 people worldwide.
The landmark acquisition - KMW’s first in the UK - will provide WFEL with new opportunities to accelerate its international sales growth, while generating synergies for new and existing customers through a combined product portfolio of vehicle and bridging solutions. For KMW, WFEL ideally suites the company’s existing bridging systems portfolio. The acquisition provides an exit for WFEL’s private equity investors Dunedin, which backed a management buyout of the business in 2006 for £48 million.
Since then, the business has secured several major new contracts, growing annual sales almost 70% to £36.2 million (YE 31 December 2011). In 2009, it won a £17.7 million order from the US Department of Defense to supply a further tranche of its Dry Support Bridge system, followed last year by a £57 million order with the Swiss Armed Forces to supply tactical military bridging assets after an international procurement contest. In 2012, the company has already secured further orders from the USA and Indonesia.
WFEL, which employs 228 people at its facility in Stockport, Greater Manchester, has also rapidly expanded its support services arm, providing inspection, repair and maintenance, spares and training services for customers around the world.
Steen Associates - an M&A advisory firm specialising in the aerospace, industrial and engineering sectors with offices in London and Frankfurt - acted as sole financial advisor to Krauss-Maffei Wegman GmbH & Co. KG (KMW).
This transaction follows Joerg Freimund’s appointment as Partner at Steen Associates last year with the objective of strengthening the firm's presence in German- and French-speaking countries.
Joerg Freimund, Steen Associates’ Partner based in Frankfurt, said: “This transaction brings together two well-established companies, both leaders in their areas of specialisation and is a strategic fit in the tactical bridging area of operations.”
“This is KMW’s first acquisition in the UK and is indicative of a trend we are seeing of mid-market German businesses across all sectors expressing interest in making cross-border acquisitions. Yet despite this, the value of in-bound transactions – foreign companies buying German ones – remains greater than the value of outbound transactions – German companies buying foreign ones.”
The company’s five-strong senior management team, led by Chief Executive Office Ian Wilson, will remain in position following the acquisition.
Mr Wilson said: “This is a transformational step in WFEL’s history. Joining the KMW group creates an exciting opportunity to leverage its significant global presence, to provide an enhanced range of complementary solutions to our combined customer base across the globe and pool our advanced engineering expertise.
“It is also a huge vote of confidence in the quality of WFEL’s products and people, who have helped the company to become a recognised global leader in its market.”
Frank Haun, CEO and President of KMW, said: “WFEL is a perfect strategic fit with our existing operations. Our combined product suite provides a modern, innovative, technically advanced and comprehensive solution to meet the needs of today’s military forces. WFEL also shares a similar engineering heritage and commitment to excellence, which gives the two companies a strong cultural fit.
“We are very excited about the prospects for the future as we develop new ways of collaborating for the benefit of our customers around the world.”
Dougal Bennett, Partner at Dunedin who sat on the WFEL board, said: “WFEL has proven to be a real hidden champion of a business, with a market leading product, world leading engineering skills and a highly respected management team. Our investment, both financial and operational, has helped the company to grow to where it is now. With our help WFEL’s has expanded its international sales and marketing reach; secured significant new contract wins and built an enviable long-term order book.”
“Through our broad operational network, we were able to introduce high caliber, experienced board members who have helped to drive the business forward. WFEL now has some very exciting opportunities open to it and we thank the management team for their dedication and hard work during our period of ownership.”
WFEL began manufacturing bridging systems in the 1970s after winning a design contest with the Ministry of Defence to produce a new tactical military bridging asset. The resulting Medium Girder Bridge, of which over 500 systems have been sold globally, first entered service with the British Army in 1971. It later developed the Air Portable Ferry Bridge, which entered service in 2005, and the Dry Support Bridge, which was first deployed by the US in Iraq in 2003.
