Tim Adams, chairman of Firsteel, which employs just over 1,000, said: 'Lonrho wished to divest themselves of the business and we wished to purchase.'
No price has been disclosed but the net tangible assets sold were around pounds 21m. The sale price is believed to be considerably less than the pounds 25m required to finance the transaction. That figure includes working capital requirements.
The financing has been arranged by Phildrew Ventures and Midland Montagu Ventures. This includes senior debt facilities of pounds 11.5m provided by Midland Bank.
The transaction represents the first buyout by Phildrew's new pounds 108m Phildrew Ventures Third Fund, which has a majority stake in Firsteel.
In 1991 Firsteel had sales of pounds 80m and was breaking even. 'Capital investment throughout the recession and reductions in the cost base have put the company in good shape to take advantage of the medium-term upturn expected in our key markets,' Mr Adams said.
Lonrho has made a series of disposals this year as it tries to reduce its debt mountain.