Hydrasun Limited (United Kingdom) - Oct 2007

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01 October 2007

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Barclays Private Equity has acquired oil and gas services business Hydrasun Group Ltd in a £75.5m secondary management buyout from Royal Bank Development Capital. Barclays Leveraged Finance provided a £41m senior debt package to support the transaction which sees BPE taking a majority stake in the newco alongside management. BPE had been tracking the company for 12 months and as such had developed a strong relationship with management when KPMG began a sale process earlier this year. BPE had completed its commercial due diligence ahead of the auction and consequently felt very confident with the business and was able to make an offer quickly after the end of the second round of bidding. The deal took 10 days to complete from exclusivity.

Exit deal

Royal Bank Development Capital backed the management buy-in of Hydrasun in 2002 (9 September 2002, page 25). The value of the deal was not disclosed. It was introduced to Royal Bank Development Capital by Invex Capital Partners, which also took a minority stake in the business.

Company

Aberdeen-based Hydrasun is a provider of fluid connectors, hoses, fittings, instrumentation, process control products and associated services to the oil and gas industry. It has several UK operations as well as bases in Holland and Azerbaijan from where it supports clients both on and offshore. BPE will look to back the international expansion of the business developing operations in other key oil and gas regions including the Caspian Sea and Asia Pacific regions. Hydrasun differs from its competitors in that its service offering includes manufacture, assembly, testing, certification and integrity management and assurance throughout service life. Rob Myers, who led the deal for BPE, commented on Hydrasun’s growth opportunities that “developments in the global energy markets are driving companies throughout the industry to have an absolute focus on environmental compliance, safety and integrity of operations and reliability of supply.” Hydrasun was established in 1976 and has a turnover of £54m to the year end March 2008. It employs 330 staff.

People

Rob Myers led the deal for BPE and joins the board of the newco. Bob Drummond is the CEO of Hydrasun. Scott Coats led the exit deal for Royal Bank Development Capital. Jamie Grant worked for Barclays Leveraged Finance.

Advisers

Debt - Dickson Minto, (Legal)Management - Paull & Williamsons, Ken Gordon, Scott Allan (Legal)Purchaser - BDO Stoy Hayward, Bonnie Kraus, Christopher Searle, Jenny Gall, Lit Bowman, Paul Piccirillo, Steve Barlett (Corporate Finance)Purchaser - Douglas -Westwood Associates, John Westwood (Commercial Due Diligence)Purchaser - Travers Smith, James Renahan, Katie Herald, Paul Dolman (Legal)Vendor - DLA Piper, Jeff Soal (Legal)Vendor - KPMG, Alan Kennedy (Corporate Finance)