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Reading: Leumi ABL finances £7m package for Magal Group

By Dan Teuton
13 January 2014
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Leumi ABL has supported the Magal Group with a £7 million asset-based-lending facility, comprising invoice discounting, a plant & machinery loan and a further additional loan to assist with the cost of tooling.

The asset-based lending firm also introduced the Magal Group to Bank Leumi (UK) which became its banker, offering a range of services including VAT deferment and BACS.

Based in Reading, Magal specialises in the manufacturer of automotive components – particularly thermostatic controls and steering components for companies such as Mercedes and Jaguar Land Rover – and has led the field in automotive mechanical engineering for more than fifty years.

Magal's requirement to seek a more flexible funding provider was triggered by fast growth in the UK. While the company has also invested in China, India, Turkey and France, Leumi ABL is funding only the UK group.

Early negotiations included meetings with Leumi ABL CEO Paul Hird and Bank Leumi (UK) CEO Larry Weiss. A combination of access to the highest level decision makers and Leumi’s ability to offer more funding than any other funding provider, gave Magal the reassurance that the Leumi proposition could meet its needs, both now and in the future.

Kevin Lowen, finance director at Magal Group, commented: “We had tried many of the mainstream banks but were unable to obtain an offer that was acceptable to us. We knew that Leumi ABL is active in the marketplace and, although our funding provider at the time was very good, we had outgrown its facility. We were looking for more flexibility and to use all the assets we have to increase our facility.

“Leumi ABL demonstrated a flexible and innovative approach, satisfied our need for growth and gave us the confidence that they would support us in the long term. A key attraction was the willingness of Bank Leumi (UK) to support us too. This wider proposition with good relationship banking was the icing on the cake. Meeting the senior team at Leumi also helped to build the relationship – they took a keen interest in our manufacturing process and showed genuine empathy for our business plans.”

Magal Group CEO Gamil Magal commented: “Bank Leumi has offered the best working relationship; it was clear that Leumi’s intention was to support our future growth programs, and the bank has tailored a financial package to meet our industry needs.”

Jonathan Hughes, regional sales director at Leumi ABL, added: “Leumi ABL was able to help Magal invest in its future. The new Jaguar Land Rover contract necessitated investing in tooling and testing, which required significant capital. We look forward to supporting Magal in its growth strategy.”

Advisers to the deal were KPMG and Shoosmiths. Pitmans acted as the company’s lawyers.

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