Octopus-backed Hydrobolt exits through deal with LoneStar

Energy parts business Hydrobolt has been snapped up by LoneStar for an undisclosed amount with help from private equity firm AEA Investors.

Octopus Investments has sold its stake in Hydrobolt six years after backing a management buy-out of the business.

Based in Wolverhampton and with staff totalling 250, Hydrobolt manufactures and distributes components for the energy market including speciality fasteners, machined parts and fittings.

Hydrobolt’s involvement with venture capital backer Octopus dates back to April 2008 when the investment firm contributed £4.5 million to a management buy-out deal worth £16 million.

Jamie Simpson, managing director at Hydrobolt, says that under the backing of Octopus, the business has achieved ‘significant growth’.

As part of the 2008 deal, Octopus brought in Peter Andrews as the company’s executive chairman, while Simon Smith, who introduced the deal to Octopus, joined the board as a non-executive director.

The exit to LoneStar is the second for Octopus during 2014 following its sale of electronic trading exchange Vega-Chi to New York-based Liquidnet three years after a Venture Capital Trust (VCT) investment.

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Jane Vinson, member of the ventures team at Octopus Investments, comments, ‘The period immediately following our investment was a challenging one for Hydrobolt’s end markets, but we were particularly impressed with the business and the management team at Hydrobolt over this time.

‘The growth experience over recent years is testimony to the quality of the business model with the hard work of Jamie and his team.’

Hydrobolt will remain a separate entity and will trade under the Hydrobolt name. The company will continue to be run by the current Hydrobolt senior management team, led by Simpson, who will report to the LoneStar CEO Santosh Mathilakath.

Acquirer LoneStar is based in the West Midlands and supplies nuts, bolts, machined components, gaskets and seals to the energy sector and heavy engineering industries.

Hunter Ruthven

Bernard Williamson

Hunter was the Editor for GrowthBusiness.co.uk from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.