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Buy Out of oil industry components business
December 2008
ESS Steels Holdings Ltd, a manufacturer of engineered components to the oil industry, has undergone one of the region’s biggest private equity backed management buy-outs of the year.
Hart Shaw Corporate Finance acted for the Vendors in the disposal process. Chris Sellars, Head of Corporate Finance commented, “This is a fantastic success story for the Shareholders and Hart Shaw. We have acted for the Company since its inception over 15 years ago and have supported it through its growth, we wish the management team continued success with what is undoubtedly a fantastic business”.
Yorkshire Bank has provided a total funding package in excess of £35m to support the MBO and growth of the company, which operates from sites in Sheffield and Rotherham, while Baird Capital Partners Europe has invested £12m and the MBO team a further £9m.
ESS, founded in 1992, represents a major success story having grown turnover from £7m in 1997 to £34m this year. Its operating companies are Engineering Special Steels Ltd, Ancon Special Alloy Steels Ltd and Sheffield Deep Bore.
The group provides a range of semi-manufactured steel alloy-based engineered products to the oil field services sector. Key clients include several of the world’s leading oil services companies. Finished products are employed in the production sectors of both downhole and wellhead completion markets.
ESS managing director Duncan Milner will take charge, supported by finance director Steven Horne. Alex Miller, one of the original founders, will remain as a consultant to the group.
The debt-funding to support the deal was structured by Robin Womersley and Kevin Hambling, both directors at Yorkshire Bank Specialist & Acquisition Finance in Leeds.
Group finance director Steven Horne said: “The oil and gas industry is a large and rapidly expanding market place. Growth is being driven by increased demand from the West together with the emergence of industrialised nations such as China and India. This has led to high oil prices which in turn underpins increased investment in markets served.”
