Equistone reaps 2.9x on sale of PD&MS to Inflexion

The sale generated a 2.9x return on Equistone's total investment in the company.

Equistone (then Barclays Private Equity) acquired PD&MS in June 2010, investing £16m in the all-equity management buyout of the business. At the time, the company was known as Wilton Group. Last May, two of the three divisions of the group, Wilton Engineering Services and Universal Coatings, were sold to the management team, leaving just PD&MS.

Equistone then injected a further £4m to take a majority stake in PD&MS, bringing its total investment in the business to £20m. The firm invested in the company via its €2.4bn Fund III.

Under Equistone's ownership, the company hired additional senior staff including a new COO, finance director and sales coordinator.

Inflexion's plans for the business include exploring potential bolt-ons and expanding the company internationally. PD&MS recently set up a base in Azerbaijan.

The firm has also introduced Alan Proctor as a senior non-executive director on PD&MS's board. Proctor is currently chairman of Inflexion portfolio company Rhead Group.

Yesterday, Inflexion announced its 2.8x return on the sale of Phlexglobal to Bridgepoint Capital Development for £42m.

Debt
A debt package has been provided for the secondary buyout by Lloyds Bank Commercial Banking.

Company
Founded in 2002, PD&MS is headquartered in Aberdeen with additional UK offices in Great Yarmouth and Dundee, as well as a base in Azerbaijan.

The company provides engineering, procurement and construction services for the oil and gas, drilling, production and marine industries. It specialises in brownfield engineering services.

PD&MS employs 200 staff. It generated £47m in turnover last year; Inflexion claims the company's core revenue growth rate is more than 20% per year. The business hopes to double its turnover by 2016.

People
Simon Rio is the CEO of PD&MS. Equistone partner Steve O'Hare sat on the company's board of directors. Inflexion investment director Catherine Richards, partner Tim Smallbone and assistant director Edward Fraser led the deal for the firm.

Advisers
Equity – Simmons & Company International (Corporate finance); Eversheds (Legal).
Vendor – PwC, Stuart Warriner, Jon Shelley (Corporate finance); Deloitte, David O'Leary, Jodi Birkett (Tax, financial due diligence).
Company – Pinsent Masons, Gregg Davison, James Fitzgibbon (Legal).

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• Topics
• Buyouts
• UK / Ireland
• Industrials
• United Kingdom
• Equistone Partners Europe
• Inflexion Private Equity
• Secondary buyout