ACT finances managements purchase of Season Control

SEASON Control, the Dublin based manufacturer of heating, ventilation and air conditioning equipment, has been sold to a management buy in (MBI) group backed by ACT Venture Capital for £3.3 million.

It is understood that ACT - which is largely owned by British and Irish institutional investors - has a 70 per cent shareholding in Warberry, the company being used as the takeover vehicle with 30 per cent held by Mr Chris Hutton, a British investor who has 20 years experience in the heating and air conditioning business and who will become managing director of Season Control.

The ACT stake will fall to below 55 per cent over the next three years, subject to agreed profit targets being met. It is understood that ACT is putting up £2 million of the £2.3 million cash that is being paid to Season Control's current owners, Mr Ben Kearney and Mr John Grainger, with a further £1 million linked to profit targets over the next three years. Mr Kearney and Mr Grainger will be staying on as executive directors of the company.

ACT director Mr Walter Hobbs said that the venture capital group was confident that Season Control, which currently has turnover of £4 million, will increase its sales to more than £10 million in the next five years. He declined to reveal the company's profits, but Season Control is thought to operate on margins of around 10 per cent, suggesting profits of around £400,000.

Mr Hobbs said that, in contrast to Britain where there are a number of large companies in the heating and air conditioning industries, the industry in Ireland was very fragmented. "Season Control has grown every year since it was set up 10 years ago and we expect it to continue to grow," he added.

The minority shareholder and new managing director, Mr Hutton, operated a company similar to Season Control in Britain for many years, which he sold in 1988. He has acted as a consultant to Season Control for the past year. Following the MBI, Mr Hutton is initiating a major expansion programme.

The non executive chairman of Season Control will be Mr Dermot Pierce, managing director of Earlsfort Centre (Developments). Mr Pierce has been responsible for the development in Dublin of the Conrad Hotel complex on Earlsfort Terrace and the East Point Business Park, near the IFSC.

Industry sources said that while management buy ins are relatively common in Britain, this may be the first time that such a mechanism has been used in Ireland. Management buy ins differ from management buy outs to the extent that MBIs involve managers from outside buying into a company while MBOs involve managers buying out their own company from other investors.