“We think UK manufacturing has a great future – much better than it’s been for the past 20 years where people have just been offshoring work,” says Dan Croft, CEO of Future 50 company Vanilla Electronics. “That’s why we’re out there, buying companies.”
The Thetford-based business has just completed the acquisition of Bela Electronic Designs ltd, a £6m-turnover company with 40 staff, based in Bedford. Bela designs and manufactures complex electronics for the medical, automotive, aerospace and other industries.
“We’re very excited about being part of the Cambridge-Norwich tech corridor – and that’s now been expanded to be the Oxford-Cambridge arc,” Vanilla’s CFO Matt Negus says. “From that point of view, the acquisition strengthens our footprint within the region.
“We were looking for complementary businesses. We’ve been working with Bela for 12-18 months, so we knew their capability,” he adds. “Vanilla’s fairly unique supply chain really helped Bela operate, so we approached the owner, because we’d been working so well together and it was an obvious fit for us.”
“A lot of the businesses of that size in our industry are still privately owned,” explains Mr Croft. “They were started often by owners who've run the business for 30 or 40 years and are approaching retirement age. Bela was definitely top of our target list for our first acquisition.”
He explains that Vanilla wanted to add a facility for electronics design – which Bela provides, along with manufacturing prototypes and managing approvals. Small batch runs can be maintained at Bela, where Vanilla intends to add a third line, but larger scale production would be managed from the main site in Thetford.
“Covid’s obviously been difficult for a lot of businesses but for UK manufacturing long-term, I think it’s going to have made people think about their localised supply chains,” says Mr Croft. “Now they’ve experienced something like this, I hope it’s going to really encourage people to bring stuff back to the UK – or the next product iterations will be designed for UK manufacture.
“That’s why we bought Bela: we wanted that capability to design, as a lot of business that’s offshored can’t be manufactured in the UK in its current guise. Having the capability to redesign stuff for UK manufacturing is really important for us.”
This shift in the market should create strong opportunities for growth – and Vanilla had already grown by around 20pc over the past year, but adding Bela effectively increases the size of the business by 50pc. “We want to carry on growing organically and both Bela and Vanilla Electronics have plenty of growth potential,” says Mr Negus. “There’s a lot of great stuff going on in the UK at the moment around hi-tech electronics manufacturing. We’re hoping that we can be the partner of choice when businesses are looking for someone to manage their supply chain.”
Vanilla is still looking for further acquisitions – Mr Croft confirms that an offer for another has already been made. “We’re only looking at quality businesses... ones we can bolt on that add value to the group and instantly go with us,” he says. “As a first acquisition, Bela’s a £6 million turnover business. Our next acquisition is likely to be about £8-10 million turnover. Leave it another 12 months and we should be looking at £12-15 million turnover businesses as well.”
For more information, see www.vanillaelectronics.com
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