Cambridge M&A advisers sell innovative engineering business


04-12-2019
Jet engine with the cover removed

An innovative engineering business which produces market-leading pressure and flow instrumentation for sectors such as aerospace, automotive and energy generation has been sold to an AIM-quoted company.

Chell Instruments Ltd (Chell) has been acquired by SDI Group plc (SDI); the AIM-quoted group is focused on the design and manufacture of scientific and technology products for use in digital imaging and sensing and control applications. This deal promises to drive further growth at Chell, accelerating the roll-out of new products and significantly enhancing SDI’s brand portfolio.

Based in North Walsham, Norfolk, Chell has more than 40 years’ experience of designing, testing and manufacturing sophisticated instruments for the measurement and control of gas pressures and flows in a wide variety of applications. Product development at Chell is usually customer-led which means the company enjoys long-term, strategic alliances with some of the best-known brands in the world like Airbus, BAE Systems, Mercedes-AMG Petronas Motorsport, Ferrari, and Rolls Royce. Chell has a dominant position in its niche markets, with its applications highly utilised in aerospace, formula one racing and nuclear power.

The company was founded by Ron and Judith Mitchell in 1976 and has built up, through targeted investment in its people and systems, significant technological knowhow and unique manufacturing and testing capabilities. The company is comprised of 34 employees and has been led by Managing Director, Nick Broadley, since 2001.

The acquisition of Chell is in line with SDI’s strategy of acquiring complementary businesses in niche segments of the scientific and industrial instrumentation sector. The Board believes that Chell will contribute positively to the development of the Group's Sensors & Control segment.

Majority shareholder, Ron Mitchell, is fully exiting the business but Nick Broadley will continue to lead the management team for the foreseeable future.

Chell’s Managing Director, Nick Broadley said: “This is an exciting time for Chell Instruments. SDI as an owner has a good understanding of the way Chell exploits its niche markets and how to grow them further. We look forward to working with SDI and taking Chell forward.”

Ken Ford, Chairman at SDI, commented: “Chell Instruments is another step in our Group growth strategy. It is a complementary fit providing potential areas for growth. The acquisition is in line with our previously announced strategy of organic and acquisitive growth and is expected to be earnings enhancing in its first full year of ownership.”

PEM Corporate Finance acted as lead advisers to Chell on the sale of the business. Philip Olagunju, Director at PEM Corporate Finance said: “It was a pleasure to have advised Ron and Nick on this transaction. PEMCF carried out an extensive marketing exercise on this deal, speaking to financial and trade buyers from around the world. From the very start we found SDI to be efficient, transparent, realistic and pragmatic, and I’m confident that Chell will go from strength to strength as part of the SDI family.”

Lake Falconer, Partner at PEM Corporate Finance added: “We met Ron and Nick several years ago and have met with them at regular intervals to help shape their exit strategy. It’s a great example of how speaking early to corporate finance advisers can help business owners to formulate their exit strategy.  Not only that but regular contact allows the plans to evolve and flex with the business and the market.  It’s good to see it paying off with a deal that works for Ron and Nick and sees Chell transitioning to a new owner that will be good for its future growth.”

Legal advice to the vendors was provided by Paul Warman at Leathes Prior Solicitors.

 

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