A SYNDICATE of angel investors has raised a “significant” six-figure sum to buy Kelso-based Border Precision out of administration.
Investor network Tri Cap confirmed it has supported a management buy-out from administrator Grant Thornton.
Border Precision has operated in Kelso since 1976 and currently has a workforce of 80 people – just over half of the 150 it employed in 2011.
The company, which produces high-end engineering products mainly for the defence and medical sectors, said it has retained the “vast majority” of its customer base while in administration. Two members of the Tri Cap board, Ian Douglas and Gavin Stevenson, will become directors of the company.
Rob Dick, chairman of Tri Cap, said: “Our members are pleased to have been able to support the management in their investment. This business is of strategic importance to both Kelso and the Borders, and we have real faith in the future of the company. We look forward to supporting the executive team in achieving its long-term goals.” The new management team, which includes Allan Valentine, Graham Sanderson and Graham Young, said in a statement: “We are excited to get the opportunity to develop and grow the business and delighted to have retained jobs in the Borders.”
The new trading entity will be called Border Precision Engineering.
Scottish Borders councillor Alec Nicol said: “The management buy-out is very good news for Kelso and the Scottish Borders. The number one priority was to keep the company in Kelso, to retain the jobs and skills in the area. This is a great outcome for the local community and reinforces the Borders’ reputation for excellence in manufacturing engineering.”
Border Precision was forced to call in the administrators in January after directors had warned of the impact of “unforeseen difficulties” of bringing in hi-tech equipment.
Losses at the 37-year-old tool-making and electroplating company had more than trebled to £645,000 in the year to the end of 31 October 2011 despite a healthy income of £7.1 million. Last year, in an effort to stay afloat, the company sold a parcel of land to a pension fund, raising £350,000.
In October 2011, the company brought in an automated laser welding system which it described as a “process of the future”. But the directors admitted that the business had been “hugely impacted by unforeseen difficulties” with bringing in new technology.