Published: Jun 16, 2013
Focus:
Growth Capital
Maven Capital Partners (Maven), a leading Private Equity and Alternative Asset manager, has led an investment in HCS Control Systems (HCS) via a Buy-in Management Buy-out transaction (BIMBO) alongside the Simmons Parallel Energy Fund. Maven and Simmons have each provided £4.25m of equity funding to support business growth, with additional investment from Front Row Energy Partners, a consortium of upstream industry specialists which invests in high quality energy service companies.
Headquartered in Glenrothes, Fife, HCS is a specialist manufacturer of engineered mechanical, hydraulic and electrical systems for the subsea oil and gas sector. HCS’s integrated service offering includes design, engineering, specialist welding and fabrication processes. Established in 1997, the business has earned a reputation for delivering fast track design, manufacture and testing of topside and subsea control systems to a global blue chip customer base including GE, Cameron, Schlumberger and Expro.
Led by a dynamic and experienced management team, HCS has built a strong working relationship with its clients, based on the ability to supply high quality and reliable products on time. The business operates in a market which is now benefitting from record levels of investment in new developments, alongside significant upgrade programmes for existing assets and infrastructure.
The oil and natural gas market is at its strongest level for more than three decades. Global consumption has grown substantially in recent years, largely driven by demand from markets such as India and China, and that growth is widely forecast to continue over the next five years. HCS is one of a small number of companies in its sector with the requisite knowledge and engineering skills to meet the increasing levels of customer demand, which has resulted in HCS’s strong recent trading record and a record order book.
The deal will provide capital to support the continuing growth of HCS, including site expansion into the Aberdeen market, as the business looks to service rising market demand.
Incoming CEO Brett Lestrange led the experienced BIMBO team, which includes Tony Kitchener as Business Development Director, Kenny Balfour as COO and a new CFO in Neil McGuinness. The management team will be further strengthened by the appointment of Graeme Coutts as Non-executive Chairman. Graeme was previously the CEO of Expro, a former FTSE 250 business with 4,500 employees worldwide, and led the 2008 Institutional Buy-out to Candover/Goldman Sachs. Brett Le Strange and Tony Kitchener have extensive networks of industry contacts which will be the initial focus of business development activity, as HCS looks to drive internationalisation by engaging with overseas partners and selectively entering new geographic markets.
The deal was transacted by Maven’s Oil & Gas partner, Jock Gardiner, together with Investment Director, Ewan MacKinnon. The Aberdeen based team has established a successful presence in the energy services sector leading 14 energy services related transactions since 2007.
Jock Gardiner, Partner at Maven, said “HCS is an impressive business with a strong reputation for subsea control solutions. With robust growth forecast for the oil & gas market, the prospects for HCS are extremely positive and we look forward to supporting Brett Lestrange and the team as they continue to build on the Company’s recent successes, whilst executing the next phase in its development. We were attracted to HCS as we saw an opportunity to invest in an established and profitable business operating in a sector we know well and where there are very positive market dynamics.”
Brett Lestrange, CEO of HCS, said "Our vision is to exploit the undoubted opportunities for growth available to HCS, and the investment by Maven and Simmons will provide valuable support in expanding into new overseas markets. The imminent opening of our Aberdeen base, alongside the existing manufacturing facility in Fife, will allow the business effectively to promote its specialist manufacturing and engineering solutions to a wider global customer base. We are delighted that Maven has chosen to invest in HCS, as it has significant experience of SME oil service businesses and the ongoing support of the Maven team will bring additional strategic input in helping us deliver our ambitious growth plans.”
