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Sentio Partners advises shareholder on sale of Sheffield Forgemasters to the Ministry of Defence

Sheffield Forgemasters shareholders have agreed to sell its entire share capital to the Ministry of Defence (“MOD”) to support a substantial recapitalisation of its defence-critical plant, equipment and infrastructure necessary to secure the delivery of components into future MOD programmes.

Ian Marwood of Sentio Partners advised the largest individual shareholder, Dr Graham Honeyman, on the terms of the sale and led negotiations with the MOD on his behalf. Simon Pilling of Womble Bond Dickinson provided legal advice and assistance in the negotiations.

The change of ownership will secure Sheffield Forgemasters’ role as a key supplier into the MOD for the long-term and is structured to invest substantial new capital into the modernisation of defence-critical assets, including plans for a replacement heavy forge line and building, a flood alleviation scheme and major machine tool replacements.

The company’s main driver of revenue and profitability over recent years has been manufacturing specialist forgings and castings for submarine platforms and surface vessels as a supplier to Rolls-Royce, BAE Systems and Babcock International, who have provided guarantees to support the financing of the company. With the company’s existing credit facilities due to expire in December and significant investment required for it to a reliable supplier into MOD, the intervention provides the financing necessary to place the Company on a secure footing.

The company provides casting and forging solutions for the world’s most complex engineering challenges. It specialises in the design and manufacture of high integrity forgings and castings offering end-to-end manufacture for steel production from a single site in the UK. Some of the largest bespoke engineered steel products in the world are produced at the Brightside Lane facility with capacity for castings of up to 350 tonnes and forgings of up to 175 tonnes finished weight.

Global markets served include UK Defence, Global Defence, Civil Nuclear, Oil & Gas, Power Generation, Renewables and Steel Processing. The company also offers design, project management, steel melting, forging, casting, machining, testing and delivery. In addition, a number of specialist services are available onsite and through an extensive supplier network.