Maven et al. invest £9m in HCS

Maven and Simmons each committed £4.25m as part of the transaction, with the remaining £500,000 provided by Front Row. Incoming management and members of the company's existing management team committed a further £1m to the deal.

Front Row is a consortium of "upstream industry specialists" that invests in energy service companies such as HCS, which manufactures hydraulic, mechanical and electrical systems for the oil and gas sector.

Tony Kitchener and Brett Lestrange, both of whom are directors at Front Row, contributed to the BIMBO of HCS separately as well as through the industry specialist group. They will subsequently take up executive positions within the company - Lestrange is to become HCS's new CEO and was described by Maven as the "obvious candidate" for the role.

Maven sourced the deal through its already-established network within the industry, including the firm's existing relationships with Front Row and new non-executive chairman Graeme Coutts.

The fresh capital from the transaction will allow HCS to finance its expansion in the form of new sites within Aberdeen, a city that is widely regarded as the hub of the offshore oil and gas industry.

According to Simmons, all parties involved in the deal saw the opportunity to invest following the decision of one of HCS's founding shareholders to exit the business.

Debt
No acquisition debt was provided for the deal, however Lloyds supplied a working capital facility to the company.

Company
HCS was founded in 1997. The company currently employs 55 staff and recorded turnover of £7.8m for 2012.

HCS, which is headquartered in Glenrothes, Fife, manufactures and tests specialist systems for the subsea oil and gas sector. The systems, which can be mechanical, electrical and hydraulic, are supplied to subsea tree vendors and service companies.

People
Brett Lestrange is HCS's new CEO, while Tony Kitchener is the company's new business development director and Neil McGuiness is the new CFO. Graeme Coutts, formerly of Petrotech and Expro, is to become non-executive chairman on HCS's board of directors. Kenny Balfour also contributed to the deal in his existing position as COO.

Lestrange and McGuiness led the transaction for the management consortium. Jock Gardiner, a partner at Maven focusing on the oil and gas sector, led the deal for the firm alongside investment director Ewan MacKinnon. Gardiner is to join HCS's board in a non-executive position.

Advisers
Equity/management - Anderson Anderson & Brown, Derek Gemmell (Corporate finance); Ledingham Chalmers, Peter Murray (Legal); Burness Paull & Williamsons, Jamie Stark (Legal); Deloitte, Graeme Shiels (Financial due diligence); Marsh, Paul Stevens (Risk due diligence, insurance due diligence); A2 Environmental, Alistair Dalziel (Environmental due diligence); Calash, Alan Evett (Commercial due diligence); Armstrong Craven, Helen Ryan (Management due diligence).
Vendor - French Duncan, Greg Callan (Corporate finance); MacRoberts, David Wylie (Legal).
Debt - HBJ Gateley Waring (Legal).

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