The
latest word on the street suggests a venture capital company has moved into
first place as the most likely business to acquire the assets of Millbrook Proving
Ground in Bedfordshire.
These rumours come at a
time when JaguarLandRover (JLR), once a strong candidate tipped to take over Millbrook,
is now enmeshed with its own new state-of-the-art research facility where it is
the lead partner in the project to invest £50m, along with Tata Motors European
Technical Centre (TMETC), WMG and the UK Government's Higher Education Funding
Council England (HEFCE).
With the new National
Automotive Innovation Campus (NAIC) as JLR’s first focus, the prospect of an
investment in Millbrook inevitably takes a back seat, paving the way for other
possibilities.
One possible name that comes to
the fore as the potential principal owner of Millbrook is Rutland Partners LLP of Regent
street, London, which describes itself as ‘a turnaround and restructuring
investor with a difference’. It is an organisation best known recently for its
investment in Bernard Matthews alongside family interests. Rutland also
describes itself as a ‘catalyst for change’; earlier this year it was nominated
for the Turnaround House of the Year Award.
One of the most publicised British
venture capitalists is Jon Moulton, best known for leading Alchemy Partners’
bid to buy MG Rover from BMW in 2000. So if the rumours about Rutland are true, then there can one reason and one reason only for the acquisition: to sell the business on at a later date for a handsome profit.
Had Millbrook been placed under JLR’s umbrella,
then the UK car maker’s engineers and managers would have been familiar with all
the capabilities offered by the proving grounds extensive portfolio. The purchase in that case would then be more about adding value to JLR products. The site
in Bedfordshire would, in theory, have made an ideal bedfellow for JLR's own
engineering facilities at Gaydon, Oxfordshire and Whitley in Coventry. However,
for any venture capital company, all such aspects of Millbrook’s business will
represent completely new territory.
But the fresh
intellect afforded by a venture capital company could well open up new possibilities
for the Bedfordshire proving ground with its formidable range of facilities and
experience, while still leaving JLR open to hire the resources that Millbrook has to offer
without making the large financial commitment that such an acquisition
would require.
But at the end of the day, whatever
Rutland Partners, or any other venture capital company might choose to do with Millbrook Proving Ground, its depth
of experience remains with wheeled vehicles and it would seem that it will have to
remain that way for a time to come. Its unique asset is the high-speed track and off-road facilities.
Inevitably, the popular
impression of any venture capital company is one of a collection ‘turnaround
men’ charged with generating wealth from the assets it has acquired, most
likely by selling them on (as a whole or in parts) at a later date at an enhanced price. Sometimes this
process can be completed in a matter of three years; on other occasions it
takes longer until the ‘right’ partner comes along. And so it may turn out to
be in the case of Millbrook.
As far as the owner of
Millbrook Proving Ground is concerned, namely General Motors, senior officials at
its headquarters in Dearborn, Michigan, may have mixed feelings. While keen to
maximise the return on their own investment, they will perhaps be equally keen
to see that the proving ground does not fall into the hands of any serious
competitor. By the same token, it has to be assumed they will naturally wish to
seek the best long-term interests of their staff at Millbrook.
JLR is, day by day, growing
on the world stage. While not by any means at this point any threat to GM, the
UK-based automaker is nevertheless a fast developing vehicle builder and one
that has the enthusiasm of India’s Tata Motors behind it.
The net effect might be
that GM would be happy to see Millbrook pass to a venture capital company
rather than to JLR, or any other automaker for that matter. Thus anything that
GM in Europe can do to thwart JLR’s progress around the world might perhaps be
viewed in Detroit as an advantage to the US company that describes itself as passionate
about the design, building and selling of the world’s best vehicles.
Meanwhile, as already
mentioned here, the expected signing over of the Millbrook Proving Ground could
take place by the end of November or early December, with public disclosure
shortly after.
In the meantime, an air of
uncertainty hangs over the Bedfordshire facility as the process of due
diligence seemed unnecessarily long and the mists of autumn begin to cling to nearby
trees and rolling countryside. ∎
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