Xtrac Ltd, the world's leading supplier of motor racing transmissions, has joined forces with HSBC Private Equity, which will be acquiring a 25% minority stake in the company as part of Xtrac's continued investment and growth plans. 

Xtrac was founded in 1984 by Mike Endean when he designed the original Xtrac 4 wheel drive gearbox. A past winner of the Queen's Award for Export, the company designs and manufactures bespoke gearboxes and gearbox internals for the motor sport industry. Its customers include teams competing in Formula One, the World Rally Championship, Indianapolis 5000 and the British and German Touring Car Championships. 

The company has grown rapidly over recent years and in 1997 Peter Digby, Managing Director, led an MBO from the founder which included a 49% shareholding for the benefit of all employees. Since then, Xtrac's skilled workforce of 190 have built a world class reputation for product quality and customer service. 

The funds provided by HSBC Private Equity will be used to finance the new custom-built 88,000 square foot factory on a 13 acre site that Xtrac has built near Newbury, and to purchase additional machinery. The funds will also be used to develop the business and to provide assistance for the award-winning employee trust scheme, allowing all the employees of Xtrac to benefit from this transaction. Chris Masterson, Managing Director of HSBC Private Equity, will join the board. 

Chris Masterson said: "Engineering is a key sector for our £1.1 billion fund and we identified Xtrac as a leading UK specialist engineering business. There is an increasing trend of private equity investment within motor sports. Business within the sector develop to a point where the next phase of growth can be greatly assisted by having a major backer with global representation. We made the initial approach to Xtrac and found the fit with our business to be excellent." 

Peter Digby said: "This is a fantastic arrangement to help Xtrac's growth. Our industry needs to make substantial and sustained investment in the latest machinery, R&D and new design. The investment made by HSBC Private Equity will support us in our plans for continuing growth. We now have a state of the art factory and a major partner with access to significant funds. With the extra equipment and personnel we will continue to offer excellent value to our customers with higher quality and better deliveries."