The Floform plant makes various parts for diesel engines

Floform in Welshpool has been for sale for some time, and last year made 60 workers redundant after losing a major order from the United States.

The new owners said they aimed to boost sales by �3m per year from �7m to �10m.

Floform, which has 106 staff and customers in North America and Europe, was previously a subsidiary of US firm Hasgo.

New managing director Phil Lawrence said: "The owners that we bought it from had difficulties selling it as a going concern, so the idea of selling it to the management team became a logical option.

"Despite being starved of investment and resources in recent times, I saw the potential in Floform, with its technology-led product range."

The company has been struggling for some time through a very difficult trading period John Hamilton, Amicus

John Hamilton, regional officer with engineering union Amicus, said the news would be a huge relief to the company's workers in Welshpool.

He added: "The company has been struggling for some time through a very difficult trading period."

Floform makes electrodes for spark plugs and precision parts for fuel injectors used in diesel engines.

But it was forced to cut 60 jobs last year after the bankruptcy of its biggest customer, the Delphi Corporation - part of the General Motors group.