Filtronic
“FGI was able to see our business for what it was, getting past our immediate growing pains, and understanding our business’ potential. Working alongside our domestic lender, FGI demonstrated their trademarked expertise, flexibility, and speedy execution. Thanks to FGI, our US Subsidiary now has the working capital it requires for continued growth and success.”
Filtronic plc.
Introduction
Filtronic plc (LON: FTC) is a publicly traded world leader in the design and manufacture of a broad range of customized RF, microwave and millimeter wave components. Filtronic’s customers include cellular telecommunications network operators and leading international original equipment manufacturers (OEMs) such as Nokia and Alcatel Lucent who supply infrastructure equipment to network operators. Headquartered in the UK, Filtronic owns subsidiaries in the UK, US, China, and Sweden.
With the growing demand for 4G enabled data services such as streaming media “anytime, anyplace”, there is a growing need for suppliers to provide solutions to satisfy technically difficult specifications to support the increased complexity within the wireless telecommunications market. Filtronic is well positioned to capitalize on this need through large investments in research and development.
Situation
Up to this point, the US subsidiary had been relying on cash from its UK parent. Despite investing heavily in research and development to develop a new suite of products the bulk of the new orders were yet to be received. They needed additional working capital and were outgrowing the level of support derived from their UK parent.
At the same time, Filtronic plc was moving to the AIM market on the London Stock Exchange from the Main Market. As part of this process, it was imperative that both the US subsidiary and the UK business be financially stable and in good standing with sufficient access to finance to enable entry to the AIM market.
Unfortunately, Filtronic’s UK lender could not finance their US subsidiary directly due to having no footprint in the US. Filtronic needed to find a lender that could provide finance for their US subsidiary and understand their business’ potential – all against the backdrop of time challenges.
Filtronic’s UK lender reached out to FGI to see if they could help.
Solution
FGI met with both the UK and US management teams to gain an in-depth understanding of their business. After numerous meetings and the completion of the due diligence process, Filtronic’s potential was clear to FGI. FGI provided the Filtronic US subsidiary with a $3.5 million USD working capital facility.
