North-east-based engineering group PD&MS Energy has been sold by its private equity backers in a secondary buyout deal worth more than £50 million.
Equistone Partners Europe yesterday confirmed the group which, with fabricator Halen, is investing £2.5 million in developing a major new offshore engineering facility at Dundee docks had been taken over by London-based private equity group Inflexion.
Equistone first became involved with PD&MS a specialist provider of engineering, procurement and construction services to the oil and gas sector in support of a management buyout in June 2010.
The move saw Equistone plough £16m into an equity-only deal for Aberdeen- and Teeside-based Wilton Group, which comprised three main business units: Wilton Engineering Services, Universal Coatings and PD&MS.
The first two businesses were sold to management last year, but Equistone retained its interest in PD&MS and moved to take a majority stake with a further £4m investment, taking its total outlay to £20m.
Equistone yesterday said it had overseen a restructuring of the business, including the hiring of a new chief operating officer and finance director, and the firm had grown strongly under its ownership.
The investor group said that it had exited the business at 2.9 times its total investment.
Steve O’Hare, former non-exec at PD&MS and partner at Equistone in Manchester, said it was confident the company would continue its upwards trajectory under its new owners.
“PD&MS’s performance has been impressive, and we’re pleased to have worked with management to grow the business, including establishing an international presence,” Mr O’Hare said.
“We are confident that the management team will continue to develop its core services in the drilling, production and marine sectors, while strengthening its market position in global engineering.”
The firm which is headquartered in Aberdeen and which in addition to Dundee has operational bases in Great Yarmouth, Brazil, and Azerbaijan has an ambitious target to double the record £47m of revenues it generated in 2013 in the next three years.
It has embedded customer relationships with major blue-chip operators such as BP and CNR, and currently employs around 380 staff on and offshore.
New owner Inflexion said it saw significant growth opportunities for PD&MS as the oil and gas industry looked to extend the working life of existing offshore assets and maximise hydrocarbon recovery.
Inflexion said its investment would enable PD&MS to accelerate its international expansion plans, develop its sales and marketing capability and look to make complementary bolt-on acquisitions.
As part of the buyout, Inflexion said it had moved to introduce Rhead Group chairman Alan Proctor as senior non-executive director.
“We’ve been tracking this business for a number of years, attracted by its ambitious management team and the global market opportunity,” Inflexion managing partner Simon Turner said.
“We’re excited to be investing in a sector that Inflexion knows well. With our previous experience, gained through investments such as Viking Moorings, SMD and Rhead Group, we see significant opportunity to support PD&MS Energy’s international growth strategy.”
A spokeswoman for PD&MS yesterday said the firm’s Dundee operation a 38,750ft2 site supporting a core workforce of around 50 employees, but with capacity to accommodate upwards of 260 contractors during peak periods would continue to operate as normal following the buyout.
PD&MS chief executive Simon Rio said: “Equistone has supported us through two rounds of investment, enabling us to strengthen our services and drive growth in both the North Sea and more recently internationally.
“This has created an excellent platform to build the business further, and we look forward to the next stage of growth.”
The secondary buyout deal was supported by corporate finance advice from Stuart Warriner and Jon Shelley at PwC, legal advice from Gregg Davison and James Fitzgibbon at Pinsent Masons, while Jodi Birkett and David O’Leary at Deloitte carried out financial and tax due diligence.
The acquisition process was led for Inflexion by Catherine Richards, Tim Smallbone and Edward Fraser.