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Case studies


Sectors: Industrial & Energy, TMT

Deal Type: MBO, Exited - Trade Sale

Transaction Value: £16 million

Dunedin contact:
Nicol Fraser



We backed the buyout of Fernau Avionics in June 2007. Fernau is a world-leading designer and manufacturer of Navigational Aids to the civil and military aviation markets in the UK, Europe, North America and the Far East. We bought the company from Glendale International, a quoted Canadian company. We invested £8m for a significant majority equity stake.

Less than two years later we sold the business to the Moog Controls Limited for £32m, giving Dunedin funds an IRR of 92% and a money multiple of 3x.

Deal Features

We funded the entire initial package, including a notional senior debt portion. Fernau was the first of our deals to be completed using the Dunedin DebtBridging model which brings certainty to the vendor and the management team that the transaction will happen. It also provides flexibility to the new buyout company because more time can be spent arranging an appropriate debt structure outside of the transaction deadline.

We were attracted by Fernau's reputation in its market for providing products with the highest technical standards - an absolute necessity in an air navigational aid. This has helped the company secure important new contracts with blue chip customers including civil aviation authorities and military users worldwide. An ageing infrastructure around the globe means Fernau is in a good position to benefit from the continuing and necessary upgrade to the installed base of navigational aids.

The Exit

Fernau is an excellent example of private equity doing what it is good at, backing the management buyout of a subsidiary of a larger group and investing in the growth of the company to deliver long-term returns. The business saw exceptional growth in the period of our investment, driven by strong sales performance and robust margins. Its market leading position has been achieved through its technological excellence and an ability to win new business against competition from much larger international groups.

In February 2009, Dunedin sold Fernau, to Moog Controls Limited, a subsidiary of Moog Inc of the USA, for £32m, creating an IRR of 92% and a money multiple of 3x.

Business Description

Fernau is a world-leading designer and manufacturer of navigational aids to the global aviation market and employs 90 people from its Luton base. Founded in 1970, the company has sold over 1000 navigational systems which are installed throughout the world. It supplies the civil and military aviation markets in the UK, Europe, North America and the Far East. In addition to the design and manufacture of navigational aids, Fernau provides associated services including site survey, installation, system commissioning, training, spares and repairs, and logistics support. Fernau's products meet the increasing demands for greater reliability, performance and control.

Navigational aids are primarily fixed, ground-based installations which transmit a series of radio signals to allow pilots to navigate safely and effectively using accurate location information. The equipment is owned and maintained by government and national bodies as it is safety and security-critical. For example the 2020 DME (Distance Measuring Equipment) advises the pilot on the distance to an airport or waypoint. Virtually all airports in the UK use Fernau's DME due to its high reliability and ease of operation.

Fernau's Perspective

Kevin Kearns, Fernau's Managing Director commented, "Quite simply Dunedin's support and involvement in our business has been exceptional. This has included setting the growth strategy for the company, the appointment of two Dunedin directors to help management implement this strategy and an increased focus on cash generation and working capital management. This allowed the company to repay buyout debt ahead of schedule. Dunedin also carried out a market review which added real insight to the company's market position and which confirmed Moog as the ideal strategic partner."

Your Deal

What people say about us

"Dunedin already had an in-depth understanding of our sector which allowed them to see the potential of a strong roll-out strategy. They worked closely with us to create value and then realise that value by a successful flotation on AIM."

Keith Rogers

Managing Director, Goals

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