GEV Case Study
Maven supports GEV's overseas expansion strategy enabling the business to scale and become a market leader in field rotor blade maintenance services.
Total ROI for Maven investors
Increase in Revenue
GEV Group is one of the UK’s foremost engineering and access companies operating in the energy sector, including being a market leader in the provision of field deployed wind turbine blade maintenance. In the global move towards cleaner, more efficient energy production, where the UK is one of the world's focal points for offshore wind energy, the effective maintenance of wind turbine blades across the globe is critical.
GEV was originally created to supply specialist manpower services to the Oil & Gas sector in the North Sea, but its industry profile and specialism in rope access services had allowed the business to identify a longterm opportunity to provide field rotor blade maintenance services to the burgeoning UK & European wind power industry. However, at that early point in its journey, GEV required external funding to help support the development of offshore wind energy services whilst still maintaining its core Oil & Gas service business.
Maven invested in GEV to back the MBO of the business to support its growth strategy to enter new international markets. The funding also enabled CEO David Fletcher to buyout two legacy shareholders, whilst create an equity pot to incentivise the existing senior management. During the time of Maven’s investment GEV successfully diversified its service offering into renewables, through its GEV Wind business, established a foothold in North America to provide additional revenues during the winter months when servicing work in Europe is reduced due to adverse weather conditions, and had grown revenues significantly to almost £16 million by the time of Maven’s exit. The enlarged business was sold to a private equity buyer, generating a 2.7x total return for Maven investors.
The challenge of developing a new market
Although GEV was a successful and respected service provider to the North Sea Energy Services sector, its focus in the early years had very much been on supplying manpower services to the traditional Oil & Gas industry, including a key area of expertise in its customer offering was the provision of specialist rope access services. The rapid development of the offshore wind energy sector, allied to the UK’s profile as a leading global expansion of renewable technologies, had allowed GEV management to identify an opportunity to significantly expand its capabilities to offer field rotor blade maintenance services, where it’s existing working-at-height expertise dovetailed well with the wind projects requiring technicians to use specialist rope access techniques.
However, the challenge for any business looking to transition its business model and operations toward developing a new market is to maintain its focus and energies on the quality of its existing service, whilst committing the financial and management expertise needed to build a viable and effective business in a new sector. The need to find development capital is invariably a significant challenge for SMEs, particularly where the balance sheet does not support traditional lending avenues. External investment is often the answer, particularly if an investor can be found that also has the business expertise and market insight to help optimise the process of quickly entering a new market, building revenues, and ultimately help create value for all shareholders.
As GEV’s CEO David Fletcher outlined: “At that point, GEV did need to source development capital, but equally we needed to address shareholder issues and ensure that the business had the correct capital structure and incentives to attract the right talent to drive growth into new markets as previously GEV had been operating primarily as a lifestyle business.”
How Maven supported GEV’s growth
The right investor will do more than just fund and facilitate an MBO and will also act as a trusted partner in shaping future growth. Maven was able to bring a lot of support and added value to the table, to support the GEV as they pursued their growth strategy.
As CEO David Fletcher explained: “We were obviously able to leverage Maven’s industry knowledge, which proved very helpful at times, the support was about more than just finance and market knowledge. Sometimes in business you have to make hard decisions, and the benefit of having a proactive backer like Maven is that they have typically seen it all before and can provide guidance at key times, which typically means your decision making can be accelerated. Crucially the timing of the investment from Maven, as well as that strategic support, enabled us to develop and successfully implement an international growth strategy. This gave us a significant head start over our competitors and also helped to de-risk our geographical exposure.”
At the time of Maven’s first involvement with GEV the business had identified the opportunity to become a global market leader in the offshore wind energy market, using its strong service reputation and considerable expertise in the Oil & Gas service sector, but required significant external funding to underpin that expansion strategy.
The key challenge for a business looking to develop its business into new markets is to balance ambitious growth plans with retaining a strong focus on its existing market and customers. A supportive and experienced private equity investor will provide crucial funding whilst also contributing strategic and market expertise to support management as they drive through their growth plans.
Maven supported the business in making the strategic decision to expand into the US. This provided the Group with additional growth potential from a significantly larger customer base, as well as important protection from the impact of European winter weather conditions on its core market. GEV quickly gained traction in the US market, winning several important contracts, and driving further growth in revenues.
CEO David Fletcher also notes: “When we engaged with Maven we had a number of clear financial goals as well as growth milestones. Ultimately, that sort of growth plan rarely ends up being on a straight line or following a precise course that you mark up at the outset, but we succeeded by forging a positive, effective working relationship. I would say that the main benefit of the partnership with an experienced investor like Maven comes from the way they can help the business through the inevitable peaks and troughs, and both parties working together towards a clear goal. That means you can react decisively to business requirements as the growth evolves, such as in our case when Maven were able to secure additional co-invest funding that provided much needed capital when one of our initiatives took off quicker than planned. This level and type of support really contributed to GEV achieving its plan and increasing revenues four-fold during the time Maven was invested.”
Developing a collaborative relationship
No-one knows a business better than the people managing it. That’s why the ambitious management teams Maven back continue to lead their businesses following investment. A supportive investor will provide a balance of challenge and collaboration as a business grows, and Maven worked closely with the senior team at GEV throughout the time of Maven’s investment, to enable the business to thrive and deliver the best possible returns for investors. In the view of CEO David Fletcher: “The relationship was always open and straight-talking. We always felt that the Maven team were supportive of our plans, and we welcomed the environment where a third party is involved in challenging strategic decisions and fine-tuning implementation.”
GEV goes from strength to strength
With Maven’s support, GEV was able to pivot its focus towards the offshore wind energy market and is now a leading global player in providing field rotor blade maintenance services and 100% focused on wind energy.
The successful growth of its wind division did not go unnoticed and the business soon attracted interest from trade and private equity buyers. KPMG were appointed to run an exit process and Maven realised its investment in GEV Group following a sale to private equity buyer Bridges Fund Management, less than four years after investing to support the MBO of the business, generating an impressive 2.7x total return for Maven investors.
“The sale of the GEV Group provided a great return for all involved,” says Andrew Symmonds, who led the investment at Maven. “The growth of the Group following the MBO was testament to the quality of both the GEV business and its senior management team. We are proud of how we supported the Directors to execute their strategy during this growth phase, resulting in a business that significantly expanded its global footprint and improved its service capability and market reputation.”