Endless reaps 10.5x on DavyMarkham exit; second exit in month

Just two and a half years after acquiring heavy engineering business DavyMarkham Limited, Endless has sold it to Indian engineering and construction giant IVRCL in a deal valued just under £10m, generating a whopping 10.5x return for the private equity firm.

The deal follows Endless' sale of Excelsyn to US-based Albany Molecular Research last month, which also saw the investor reap a 4x return on its original investment.

"It was the appropriate time to exit our investment in DavyMarkham, as the company had experienced a swing in profitability of between £2-3m in the last 2.5 years," says managing director of Endless Chris Clegg, who led the original investment and exit of the company. 

The private equity firm appointed Deloitte to search for buyers for the business in September of last year, as Endless had expected to sell DavyMarkham to a foreign buyer as it believes the company to be a "key strategic asset" for a global player in the market, especially with the current exchange rates.

In recent years, Sheffield-based DavyMarkham has supplied large infrastructure products to projects such as the Channel Tunnel boring machine, the Millenium Bridge and Heathrow's Terminal Five Control Tower. Davy and Markham were two independent companies that both originated in the 1830s, finally merging in 1997.

Endless acquired Davy Markham in July 2007 from Norwegian company TH Global following a sustained period of heavy losses under various owners. The investor backed Kevin Parkin (with whom it had an existing relationship) and Duncan Hay, as managing director and financial director, respectively. Within a year of acquiring the business, the private equity firm helped return the company to profitability by modernising the business in terms of cost-efficiency and improving DavyMarkham strategically by expanding it into the nuclear sector. During the holding period, turnover increased from £15m to £20m.

Clegg believes that both the DavyMarkham and Excelsyn deals reflect the investor's ability to take on tough turnarounds: "We look for companies with good business models and don't get hung up about their historic losses but focus solely on the positive change we bring to these businesses."

 

 

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Exits
• UK / Ireland
• Industrials