World's leading supplier of motor racing transmissions

Xtrac is the world's leading supplier of motor racing transmissions. It designs and manufactures bespoke gearboxes and gearbox internals, and its customer base includes teams competing in Formula One, the World Rally Championship, Indianapolis 500, and the British and German Touring Car Championships.

Xtrac was founded in 1984 by Mike Endean when he designed the original Xtrac four wheel drive gearbox. The business grew rapidly as Xtrac expanded the number of race formulae in which it was operating and increased market share. In 1997 the Managing Director, Peter Digby, led a Management Buyout from the founder. This included a 49% shareholding for an employee trust scheme, set up for the benefit of all employees.

In July 2000 Montagu acquired a 25% stake in Xtrac as part of an expansion finance package. Xtrac's dominant market position and the potential to continue the strong track record of growth made this a very attractive investment opportunity. In a highly competitive auction process, Montagu won through ahead of five other private equity houses which also made offers for a stake in the business.

The funds provided were used in part 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 an important step in the development of the business.

The funds were also used to provide assistance to the award-winning employee trust scheme. We worked closely with the management team to enable all employees of Xtrac to benefit from the transaction, and to ensure that the trust could continue to provide benefits to the employees in the future.

This transaction shows how Montagu has, in the past, helped a privately owned business to progress to the next stage of its development.

Deal details

Deal type: Expansion Finance Investment Year: 2000 Country: United Kingdom Status: Realised Value: Undisclosed Industry Sector: Industrials