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UK’s LDC takes minority stake in Express Engineering

10 Oct 2013

UK mid-market private equity firm LDC has backed the expansion strategy of precision engineering company Express Engineering, taking a minority stake in the company.

The deal backs the management team of Express, led by founder and chairman Chris Thompson and managing director Nigel Davison, to continue to grow the business and to capitalise on the growth dynamics in the international oil and gas sector, according to the firm.

Express supplies precision machined components and products into the oil and gas market. Its global customer base includes FMC Technologies, Aker Solutions, GE, Cameron, Schlumberger, National Oilwell Varco and Weatherford.

The business, which is headquartered and has major operations in Gateshead, also has a rapidly growing subsidiary called Petrotec in Sao Paulo, Brazil and also recently acquired the trade and assets of the Stokesley-based engineering business Burdon.

For the financial year ending March 2013, the combined group recorded revenues of £30m, represents an almost three-fold increase since 2010.

John Garner, director and head of LDC in Yorkshire and the North East, said, “Our investment will allow Express to further broaden its proposition and bring much needed capacity into the market.

“In recent years, the team at Express has done an exceptional job of growing the business. The outlook for the oil and gas market is compelling and there are very few businesses in the sector with Express’ quality of service, breadth of capability or global footprint.”

The transaction follows previous investments the manufacturing and specialist engineering sector, in companies such as Aberdeen-based Ramco Oil Services in March 2013 and its reinvestment in global aerospace business MB Aerospace in June 2013. The mid-market investor has pledged to invest a further £100m into the sector on top of its original £200m target, which was set in 2011.

In 2013, LDC’s Yorkshire and North East team has backed the buyout of NRS, the former healthcare division of listed multi-channel retailer Findel. The team has also exited its investments in temporary access systems provider EVE and technology services provider Trustmarque through a £43m secondary MBO backed by Dunedin.

A package of senior debt facilities to support the transaction was provided by Lloyds Bank.

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