Published: Jun 29, 2010
Focus:
Growth Capital,
Private Equity
Private Equity Investment Supports Management Buy-out of Energy Services Company
An investment by Maven Capital Partners into Aberdeen-based XPD8 Solutions Limited has facilitated a management buy-out estimated to be worth in excess of £6million.
Maven’s investment of more than £2million has enabled the management at XPD8 to buy into the fast-growing energy services business which is aiming to double in size in the next three years by exploiting the opportunities in the expanding safety management and maintenance sector of the global oil and gas industry.
This transaction represents Maven’s seventh new private equity deal completion in Scotland since the business was established, following the buyout of the private equity division of Aberdeen Asset Management PLC in June 2009.
Formed in 2003, XPD8 offers efficient and cost-effective asset management and integrity management solutions, using bespoke software and skilled engineers who specialise in asset integrity services.
With current annual turnover approaching £4m and 30 employees, XPD8 has grown rapidly and now boasts a blue-chip client base that includes BG Group, ConocoPhillips, Apache, BP, Nexen and Petro-Canada.
The management team, including Neil Arthur, Gordon Ellis, Mike Noble and Scott Morrison who become shareholders under the transaction, will drive the business forward along with founder Mark Cavanagh.
This experienced management team will be complemented by the appointment of Allan Merritt as chairman and John Duncan as finance director, both of whom have significant private equity experience in the energy services sector.
Mr Cavanagh said: “XPD8 has a strong order book and is forecasting significant growth in revenue and profitability over the next three years from new and existing customers. Neil and Gordon have played a significant part in our development over the years and it is appropriate that they now have a stake in the business as we pursue new opportunities in the North Sea and internationally.
“We are looking forward to working with Maven as they understand our marketplace, have confidence in our growth strategy and respect for the highly-talented management team.”
The Maven investment was led by its Aberdeen-based energy investment team of Jock Gardiner and Ewan MacKinnon.
Maven Partner Jock Gardiner added: “We are delighted to provide equity funding to assist the senior management to buy into such an attractive business with excellent growth potential.
“Mark Cavanagh and his management team have created an excellent business model with a world-class customer service offering in what is a very important sub-sector of the energy services market. We are delighted that Mark remains a shareholder and is actively involved in the business.
“Maven looks forward to supporting the continued growth and success of XPD8 in the future.”
Maven provides equity finance for established and entrepreneurial businesses with enterprise values of between £5 million and £25 million, supporting management buy-outs/buy-ins, acquisitions, expansion and buy-and-build strategies, and typically providing equity funding of £2 million up to £10 million.
Advisors to the deal include Simmons & Company, Peterkins, Ritson Smith, Paull & Williamsons, Johnston Carmichael and Calash.
Nick Dalgarno, managing director of Simmons & Company International Limited, said: ”Integrity services is currently an area of real focus in the oil industry as exploration and production companies seek to meet the challenges of maximising production and controlling costs whilst delivering safe operations from an ageing infrastructure.
“The maintenance evaluation and planning services provided by XPD8 play a key role in enabling clients to extend the life of these ageing assets and will also be an important aspect of the development and upgrade of these assets going forward. The investment by Maven, allied to XPD8’s reputation for adding value through high quality services, provides a platform for growth both in the UK and internationally in the coming years.”
