Coventry-based Covrad Heat Transfer Ltd (Covrad) has received a £5 million boost in a deal which sees a2e, the prominent Manchester based investment boutique acquire a controlling stake in the world leading engine cooling technology business.

With over 105 years experience in designing and manufacturing specialist/bespoke cooling solutions and equipment for OEMs including; Cummins, Perkins, Terex and end users such as Bombadier, Alstom and Virgin Trains, Covrad is located in Canley near the city.

With a turnover of circa £17 million, Covrad has received equity and mezzanine debt from a2e and partners and the deal was initiated, negotiated and structured and funds raised by a2e Venture Catalysts Limited. Enterprise Finance Europe – one of the UK’s leading asset based lenders and Lloyds TSB have provided a structured finance solution of circa £5 million to complete the transaction.

Employing 260 people, Covrad’s products have recently undergone a complete redesign/re-engineering process to remain at the forefront of technological development and are exported worldwide.

Amin Amiri, managing director of a2e explained: “Following the acquisition of Spiro-Gills Limited in March last year, Covrad is the next piece of the jigsaw in building a market leading, industrial engineering group. Spiro-Gills is now profitable, cash generative and without debt – after having lost £3.8 million in calendar year 2003.

“The Group now provides a wide spectrum of processes and engine cooling technology, design and technological capabilities to its prestigious customer base world-wide.”

Jeremy Smith, director with Enterprise Finance Europe said: “This deal represents a growing trend of investor-initiated transactions in the mid market. It is a good example of how deals can be completed in reasonable timescales when all parties work together, take a commercial and pragmatic view and are committed to bringing the transaction to an expedient conclusion.”

Amin Amiri said that despite the complexities of the deal, it was negotiated, structured and financed in an eight-week timescale.