Deal Type: Institutional buy-out
Year: 2000
Business: Friction materials
Funds raised: £487 million
Realised: In portfolio
Operating in 13 manufacturing facilities world-wide, BBA Group's automotive friction division employs over 3,600 people and is Europe's leading manufacturer of friction materials used in braking systems. It manufactures the full range of friction material products, including disc brake pads and drum brake linings for both the passenger and commercial vehicle markets. Its main brands include Textar, Mintex and Don.

In late spring 2000, we approached BBA with a proposal to acquire this non-core business. HSBC was already well known to BBA through a strong relationship with HSBC Bank's corporate and institutional banking division.

Our proposal was accepted by BBA. An agreement was reached for us to carry out the due diligence and put together a £487m (Euro 776m) financing, which was arranged over a period of less than two months

The market reaction to the transaction was positive. BBA has sold an excellent but non-core business for a good price. The depth of our resources and the experience of our execution team were critical factors in making the transaction happen

Deal Type: Expansion finance
Year: 2000
Business: Motorsport transmissions
Funds raised: Not disclosed
Realised: In portfolio
Xtrac is the world's leading supplier of motor racing transmissions, with customers including teams competing in Formula One, the World Rally Championship, Indianapolis 500 and the British and German Touring Car Championships.

In July 2000 HSBC Private Equity acquired a 25% stake in Xtrac as part of an expansion finance package. The funds provided were used to finance a new custom-built factory and to invest in state-of-the-art machinery. Investment is critical in the motor racing industry in order to remain competitive, and Xtrac saw the introduction of an external investor as important step in the development of the business.

One of the principal shareholders in Xtrac is an employee trust scheme, set up in 1997 for the benefit of all employees. We worked closely with the management team to enable all employees of Xtrac to benefit from this transaction, and to ensure that the trust could continue to provide benefits to the employees in the future.

This transaction shows how we can help a privately owned business to progress to the next stage of its development. With the backing of HSBC Private Equity, Xtrac is well placed to continue its growth.

Deal Type: Institutional buy-out
Year: 1998
Business: Automotive products
Funds raised: £98 million
Realised: In portfolio
AutoWindscreens is a well known brand name in the United Kingdom, providing automotive glass repair and replacement services throughout the UK and Ireland. In 1998, HSBC Private Equity topped a number of competitive bids from competing financial and trade purchasers when the company's parent, Heywood Williams Group plc, put the business up for sale via a controlled auction.

Having won through the auction process, HSBC Private Equity recognised the abilities of the incumbent management team who had worked together for over 10 years and had delivered a track record of uninterrupted growth. As a result, we were delighted to invite them to subscribe to the equity of the business and work with them to take the company forward.

Winning through in competitive bid situations requires an institution such as HSBC Private Equity to convince the vendor and its advisers that we will deliver.

Deal Type: Institutional buy-out
Year: 1997
Business: Port management
Funds raised: £77 million
Realised: 1998
Situated on the coast of East Anglia, Harwich Port has served traffic between the UK and Holland since 1661.

In 1997, HSBC Private Equity approached the port's owner, Stena Line AB, with a view to acquiring the business. The approach to Stena was assisted by the close corporate relationship between HSBC Bank plc's Shipping and Aerospace Division.

In the course of completing the £77m deal, we introduced other parts of the HSBC Group to the transaction. For example, HSBC Bank was invited to pitch for the senior debt facility and HSBC Gibbs, having tendered for the company's insurance requirements, put together a highly competitive package servicing all the company's insurance needs.

The HSBC Group was also involved when the investment was realised. HSBC Bank provided the new acquirer with a £200 million acquisition finance facility.

The ability to facilitate transactions in this way and lever off the powerful resources of the HSBC Group can often be a critical factor in making an investment a success.

Deal Type: Institutional financing
Year: 1997
Business: Manufacturer of household tissue
Funds raised: £145 million initial finance, £20 million follow-on finance
Realised: Trade sale 1999
In 1997, HSBC Private Equity led and structured a £145 million financing in which it acquired a significant stake in AM Paper Group, a Lancashire-based manufacturer of household tissues. Our investment enabled the business to invest in new manufacturing plant and machinery.

The deal allowed the founders of the business to reduce their personal exposure by taking part of the consideration in cash, together with the opportunity to generate a further return from the capital investment programme.

In 1998, HSBC Private Equity provided further funding when we financed the strategic acquisition of Pennington Paper Products, a business supplying complementary household tissue market. This acquisition involved raising a £20 million package of acquisition finance.

AM Paper was sold to SCA of Sweden in September 1999.

The relationship with AM Paper demonstrates how HSBC Private Equity can assemble a tailor-made funding package to meet the objectives of the owner managed business, assist a business in its acquisition strategy and establish a robust capital structure to support future growth.

Deal Type: Management buy-out
Year: 1996
Business: Safety switches
Funds raised: £31 million
Realised: Trade sale 1999
The £31m buy-out of EJA Engineering, which HSBC Private Equity led in 1996, was typical of the deals that we can do with a successful privately owned business.

The company is the worlds leading manufacturer of electrical and machine safety switches. When we were introduced to the company, the founder and majority shareholder had taken a step back from the day to day operation of the business, and had decided to fully retire and realise his investment. In competition with an interested trade buyer, we were invited to work with the next generation of management who were keen to drive EJA through its next stage of growth. This led to the launch of a successful counter-bid for the business.

In 1999, the company was sold to Rockwell of the USA, a global electronic controls and communications company.

With our assistance, the company and its management team successfully completed the transition from privately owned company to a valuable part of an international group with market leading positions in industrial automation, avionics and communications.

Deal Type: Institutional buy-out
Year: 1996
Business: Manufacture of EMC products
Funds raised: CHF159m (£88 million)
Realised: Listing 1998
In 1996, HSBC Private Equity financed the CHF159m (£88m) acquisition of Schaffner Electronik AG from the Swiss industrial group Elektrowatt AG. The deal was undertaken with both local and European support via HSBC Private Equity and its local Group affiliate, Zurmont. Schaffner is a global market leader in a growing niche of the electro-magnetic compatible market. It manufactures products which guarantee the reliability of electronic equipment, which may be subject to electro-magnetic interference.

When Elecktrowatt decided to sell, we were required to complete the transaction within four weeks. Moreover, the funding structure had to comply with complex Swiss investment regulations and the necessity for borrowings in many jurisdictions. The commercial and tax due dilligence on the deal covered the jurisdictions of 10 separate countries.

In 1998, Schaffner was realised via a flotation on the Geneva Stock Exchange.

This buy-out demonstrates how HSBC Private Equity can work with its associates to provide innovative solutions to meet the requirements of local vendors and complex international businesses.

Deal Type: Management buy-out
Year: 1995
Business: CTN retailing (Forbuoys), drinks vending, cigarette vending
Funds raised: £173 million
Realised: 1998 recapitalisation, £75 million follow-on financing
In 1995, the mangement of the UK Retail division of Gallaher Limited wished to transact a management buy-out of their business. Their bid, supported by HSBC Private Equity, was successful in the face of strong competition from both trade and financial buyers, and was completed within three weeks of the team being granted exclusivity.

In the short period available, HSBC Private Equity led and arranged the necessary financing and secured a large senior debt and working capital facility. The due dilligence, including commercial, marketing, accounting, legal and property, had to be run in tandem with arranging the financing and negotiating the deal with all parties involved.

Our relationship with TM Group continues. In 1998, we arranged the first refinancing of a business via a sterling/dollar bond issue in Europe. We subsequently provided further equity allowing TM Group to make the £75 million acquisition of the Martins Newsagents Group.

Providing follow-on finance and helping a business grow shows faith in the management team and requires a commitment to a business, which HSBC Private Equity will provide.

Deal Type: Acquisition, Recapitalisation
Year: 1993, 1996
Business: Clinical research
Funds raised: £25 million
Realised: Merger on NASDAQ 1997
In 1993, when the pharmaceutical organisation Innovex wanted to acquire Clinical Research Foundation (CRF) from CH Boehringer, it turned to HSBC Private Equity for help. HSBC Private Equity underwrote the £7.5 million funding required for the transaction.

Formed in 1979, Innovex was a contract pharmaceutical organisation serving the pharmaceutical industry. It also provided contract hire of sales and clinical research staff.

HSBC Private Equity developed a continuing relationship with Innovex as it developed and grew into a highly successful business. In 1996, it undertook recapitilisation and HSBC Private Equity supported the businesses by providing a further ?18m of equity.

Shortly afterwards HSBC Private Equity led and arranged a merger of the business with the quoted US group Quintiles. The newly formed NASDAQ-quoted group was capitalised at a value in excess of ?500 million.

The massive growth in value of Innovex illustrates how private equity can be put to work to help a successful business. Our relationship with the company through its years of growth shows how strongly we believe in the concept of partnership.

Deal Type: European acquisition
Year: 1989
Business: Manufacture of diesel engines
Funds raised: Lit 74 billion (£30 million)
Realised: Trade sale 1994
HSBC Private Equity supported the purchase of VM Motori, the state-owned Italian diesel engine manufacturer, in 1989. The transaction represented the largest institutional purchase supported by management in Italy at that time. The company subsequently endured mixed fortunes and, in the early 1990s, went through the difficulties of recession and legislative changes which adversely affected diesel engine sales. HSBC Private Equity kept faith with the company and invested the necessary further funds to support the business through this difficult period.

In 1994, HSBC Private Equity, supported by management, identified a purchaser for the business and negotiated its sale to Detroit Diesel Corporation Inc for a consideration of Lit 198 billion (?80 million).

When HSBC Private Equity has committed to a business, we will not interfere with its day to day management. However, we will try to provide long term financial support to help an investment through economic cycles. We will also give constructive assistance whether helping in acquisitions or realising value for all the shareholders. A suppo rtive investor should stand by a business in which it believes.