Award-winning engineer stake over their neighbour

Apr 11 2008 by Karen Dent, The Journal

AN engineering company has added a neighbouring firm to its portfolio to create a business with 150 employees and annual sales of £14m. Gateshead-based Responsive Engineering (Holdings) Ltd took over Exact Engineering – based nearby on the Team Valley – for an undisclosed sum.

The deal was completed before the changes to the Capital Gains Tax regime kicked in at the start of the new financial year.

Responsive Engineering, which won the manufacturing award in last year’s North East Business Awards, was set up in 2000, but its individual subsidiaries have been trading since 1991.

They are precision welder Weldex, Streamline, a laser profiling and water jet cutting expert, pressing firm Pressex and precision machining company Kingsway. Exact, which is also a machining expert, will be amalgamated with Kingsway to form a major sub contract machining business with clients in the oil and gas, power generation and defence sectors. The management and staff at Exact will remain in place. Responsive’s managing director Peter Bernard said: “When we merge the two, we will be a very powerful force in the machining industry. Our objective is to grow and gain a lot more skills.

“We have been growing our business and we intend to continue through organic growth and acquisitions.”

The acquisition was funded by cash and debt provided by Lloyds TSB Commercial.

Spokesman David Dick said: “This acquisition will provide strong synergies for both businesses and we have worked closely with management to quickly devise tailored lending facilities to support the transaction.

“Responsive Engineering has been our customer for more than 20 years and this latest investment will allow the firm to continue pursuing an ambitious growth strategy.”

Responsive received legal advice from Hay & Kilner and UNW provided due diligence and tax advice.

Corporate finance advice was provided to Exact Engineering by Clearwater Corporate Finance and legal advice came from Muckle LLP.