BTG delivers pre-pack sale of UK powertrain subsidiary

The Challenge

The UK subsidiary of a German engineering group specialising in advanced powertrain systems had been established to service a major automotive contract; however, when the client opted to contract directly with manufacturers, revenues fell sharply. When the wider German group entered insolvency, this created a material risk that a £30 million cross-guarantee could crystallise, significantly impacting creditors and destroying the subsidiary's future viability. The complex group structure and legal ambiguity surrounding cross-guarantee enforceability created significant transaction complexity and extreme time pressures.

Our Approach

We launched an accelerated M&A process, approaching over 170 potential acquirers to maximise interest. Thirteen parties entered non-disclosure agreements, with our team facilitating management presentations for six bidders. We secured interest from both financial and trade acquirers, ultimately generating two serious offers. Our cross-border expertise proved critical in addressing German insolvency implications whilst structuring a sale that protected the UK subsidiary value and employment.

The Outcome

We executed a pre-pack sale before the £30 million cross-guarantee could crystallise, safeguarding 21 jobs and ensuring trading continuity. The transaction preserved substantial creditor value that would have been destroyed by cross-guarantee enforcement, whilst safeguarding the UK subsidiary's diversification into an adjacent sector.