Luxfer

Activity
Manufacture of aluminium products
Acquired
Aug 1996
Realised
Apr 2000
Sector
Industrials

Business
In August 1996 British Alcan, the UK subsidiary of Alcan Aluminium Corporation of Canada, decided to dispose of its entire downstream operations. These manufactured aluminium products such as extrusions, plate, tubes, cylinders and foil together with two businesses manufacturing magnesium powder and zirconium. Many of these operations were significant players in their respective markets. Luxfer, for example, was the leading worldwide producer of high-pressure aluminium gas cylinders. Cinven and investors supported an able management buyin team that had a clear strategic plan for the group.

Strategy
The management aimed to reduce costs across the group. The team had considerable experience not only in the aluminium sector but also in cost reduction and improving operational efficiencies. This strategy would enable the group to better cope with the cyclical nature of its markets by lowering its break-even trading level. It would also position the business to leverage its strong presence in its specialist market sectors.

Outcome
In 2000 Luxfer paid a special dividend to Cinven and investors equivalent to twice the cost of investment.

Multiple returned on investment: 2.4x