Overview
We led the £10 million MBO of CGI from the Colebrand Group in December 1998. The business performed ahead of expectation, and by 2003 had paid down most of its bank debt and repaid all of the institutional loan stock. With one of the founder directors looking to retire, and a desire amongst the other shareholders to realise value from the investment, the business was recapitalised in June 2004.

Deal Features
The investment strategy at the time of the buyout was to grow the business organically with a view to exit in three to five years. Since 1998, CGI had grown ahead of expectations with significant potential for further growth. It was therefore decided in 2004 that, rather than fully exiting the investment, all investors would realise a portion of their capital uplift through a recapitalisation, with new debt facilities taken on by a Newco to fund the cash distribution.

The £25 million recapitalisation involved setting up a Newco with an increased management stake in recognition of the success of the investment to date. Bank of Scotland provided £14m of new senior debt. The key factor that made the recapitalisation a success was that we had invested in a business with a proven management team and investors who were willing to continue backing it.

CGI opened a new factory in 2004 with sufficient capacity to allow it to penetrate new export markets. With a proven track record of profitability and cash generation, the prospects remain attractive.

Business Description
CGI is a leading manufacturer and supplier of specialist fire resistant glasses. Two thirds of the company's products are exported to markets in Europe, the Far East and elsewhere. One of CGI's major products, Pyroguard, which features a unique, patented wire-free protection glass, is the market leader in a number of countries. CGI's products have been used in many prestigious buildings throughout the world including Hong Kong Airport, Houses of Parliament, Granada TV Studios, Warwick Castle and most recently Heathrow Terminal 5. In 2004 CGI received the Queen's Award for Enterprise in recognition of its export achievements. The market is one where there is increasing legislation offering growth to existing players and barriers to entry by new players.

CGI's perspective
"Our relationship with Dunedin has been a long-standing one. Their support has been invaluable and I have been particularly impressed with their pragmatic approach to problem solving. In addition to the financial benefits of the partnership, we have found Dunedin to be very open and honest and easy to get along with." Tom Ritchie, Managing Director, CGI