Cutwel

Business Description

Cutwel is a specialist distributor of engineering cutting tools and machine tool accessories. Operating from its purpose-built, 24,000sq ft distribution facility in Cleckheaton, West Yorkshire, Cutwel specialises in supplying precision cutting tools and machine tool accessories to the engineering industry throughout the UK and Ireland. Cutwel represents several leading global manufacturers including YG-1, Korloy, Gerardi, Benz and Simtek.

Exit

NorthEdge announced the sale of Cutwel to to Inflexion Private Equity Partners in August 2024, following a period of strong growth. The exit was led out of our Manchester office by Andy Ball, Partner, and John Hammond, Director, alongside the Cutwel management team. The deal provided a strong return for NorthEdge Fund II, delivering over a 3x gross return, and represented our ninth divestment from Fund II.

Building Better Businesses, Together

We invested in Cutwel in May 2018, supporting the business to refine and accelerate its disruptive commercial model, alongside building a scalable platform fit for future growth through investment in people, technology and operational infrastructure.

Since then, alongside appointing a Chair and CFO to complete the Board, the business has built out the operational leadership team with six critical hires including a a Head of Operations and a Head of Sales and Marketing, who has built out the marketing, sales and account management team from 15 to over 45 people.

The business also placed a significant focus on improving digital customer acquisition and embedding a data-driven account management culture – resulting in a resilient and re-occurring revenue model, which enabled the business to take market share and provides resilience through economic cycles.

In addition to this, Cutwel recognised the importance of ESG in supporting its long-term growth ambitions, becoming one of the first of our portfolio companies to publicly commit to a net zero target and ensuring it remained an employer of choice in the region. From a social impact perspective, the business contributed over £31m of GVA to the UK economy in 2023⁽¹⁾, with the majority of this contribution concentrated in Yorkshire and across the North of England, achieved Great Place to Work accreditation and won a Yorkshire BVCA Vision Award.

As a result of this investment, the business has grown its headcount by 60% and its customer base by 50%, resulting in c.70% revenue growth, c.90% EBITDA growth, 14% EBITDA margin improvement & over 100% average Net Revenue Retention. It is this platform that will support the business to continue to grow market share during its next phase of investment.

Adam Gillard, CEO of Cutwel, said: “With NorthEdge’s support we have built a platform that is fit for future growth and we are excited to build on this momentum with our new partners, Inflexion.

“Our growth plan is focussed on building deeper relationships with existing customers; utilising our digital and data capabilities to acquire new customers; continuing our focus on operational excellence and expanding our product range. It is thanks to NorthEdge’s belief in our team and our plan, alongside their local, practical and commercial support that we are in the position to take this business to the next level.”

John Hammond, Director at NorthEdge, added: “We are proud to have played our part in supporting Cutwel achieve strong top and bottom line growth, despite the challenging market conditions the business has faced since our initial investment. By refining and investing in its disruptive sales model and operational platform, the business has continually outperformed competitors whilst retaining its focus on being a great place to work for its people.

“Cutwel is a great example of a regional business creating local and national impact, ready for the next stage of its growth journey. We are delighted to have delivered another strong exit for Fund II and remain excited to see what Adam and the Cutwel team achieve over the coming years.”

_⁽¹⁾ See NorthEdge ESG Report 2023 for further information.