Sullivan Street carves out Tracerco from Johnson Matthey for GBP 55m

Rachel Lewis
03 May 2023

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UK-based Sullivan Street Partners and Scottish family office Souter have acquired Tracerco, the oilfield detection arm of Johnson Matthey, for GBP 55m.

Souter Investments is a longstanding Sullivan investor, said the sponsor in a statement. Sullivan does not deploy capital via funds but typically invests GBP 20m to GBP 50m of equity to take ownership or controlling stakes.

Sullivan's investment will help Tracerco bring its solutions to a wider range of customers in current and new markets, as well as sectors beyond its traditional oil and gas base, said the sponsor.

The complex situations investor told Unquote in February that it is looking to strike "at least" two deals this year and could soon raise its first fund, although its deal-by-deal model continues to work well.

Sullivan said in the same statement that it brings extensive carve-out and operational expertise to support the company's separation from Johnson Matthey and establish it as a standalone company.

Johnson Matthey had earlier appointed Deloitte to oversee the carve-out of Tracerco, marking its fourth attempt to sell the company, as reported by Unquote's sister publication Mergermarket. The process marketed the company off GBP 8m EBITDA, as reported.

Aurelius had also been circling the asset during this exit attempt, as reported.

The previous stalled exits had seen a wide mismatch between buyer and seller price expectations. The latest sale process saw the vendor hope for a GBP 60m EV, while its first attempt in 2017 saw it target GBP 100m, as reported.

Company
Tracerco is a global business providing specialised detection, diagnostic, and measurement solutions, operating out of sites in 16 countries to service over 50 jurisdictions. Tracerco uses innovative proprietary technologies developed in the UK and intellectual property in both nucleonics and chemical tracing.

Advisors
Vendor - Deloitte (M&A).

People
Sullivan Street - Zeina Bain (managing partner).