Wyko, the privately held Black Country-based supplier of industrial goods and services, has gone Dutch in a £139 million acquisition deal.

The business founded by engineering entrepreneur Philip White in 1962 was taken over yesterday by Eriks Group, a listed company based at Alkmaar in the Netherlands.

The Dutch company bought out the total share capital of Wyko from Royal Bank Investments, the private equity arm of Royal Bank of Scotland, which funded a management buyout in 1999.

Wyko is the UK's biggest supplier of engineering components and services to the machine maintenance market and employs more than 2,000 people at 160 centres throughout the country.

The Halesowen-based business is this year expected to show an operating profit of £13 million on sales of £240 million.

Wyko was formed by Mr White, who is still involved with the company in his role as chairman of the trustees of the pension fund, as a small engineering company and opened its first bearing distribution branch, Lye Bearings, in 1966.

Floated on the London Stock Exchange in 1985, it was delisted and taken private by Mr White and his team in 1999 via an MBO in 1999. The move was prompted by directors' frustration at the low valuation put on the company by the market, despite steady increases in profits, and their inability to raise money for expansions through share offerings.

The current management team, headed by chief executive Bill Wilson, knows Eriks Group well and believe the merger will be good for the business and its employees.

"Eriks is a fantastic company and the merger is going to be very complementary in terms of geography and product ranges," Mr Wilson said.

"There are no adverse implications for us and our employees, which is one of the attractions of this deal for us."

About ninety per cent of Wyko's business is done in the UK while Eriks, which has been listed on the Euronext Amsterdam market since 1977, is strong in the Netherlands, Belgium and Germany.

Jan van der Zouw, chief executive of Eriks, said the merger was part of a continuing consolidation process in the sector. "The UK is an important element of the European market and Wyko has some very interesting assets in terms of know-how and an interesting product mix," he added.

The deal, which is subject to approval by Eriks' shareholders, will create a business generating pro forma sales of about £570 million a year employing about 4,200 people.

It will be the undisputed European leader in the field, Mr van der Zouw said.

Royal Bank Investments was advised by Hammonds' corporate team in Birmingham, led by partner Martin Letza and Bradley Quin.

"This is a big deal for the region and marks a new phase in the life of a longstanding and successful Midland company, giving it the advantage of Eriks' strength in Europe and beyond," Mr Letza said.

Other advisers included corporate finance specialist Baird, PricewaterhouseCoopers and Ernst and Young.

Mr Wilson and Wyko chief operating officer Mark Dixon are to join the Eriks board.