LDC, the mid-market private equity arm of LloydsTSB, has invested 6.5m (€7.3 million) in Nuclear Engineering Services, a niche engineering applications group focusing on the nuclear, marine defence and other specialist industrial sectors. So far this year, LDC has placed more than 50 milion of funding in three deal transactions valued in excess of 150 million.
The investment by LDC sees two leading Midlands-based organisations collaborating to drive a growth strategy. The business currently benefits from long-term nuclear decommissioning projects, ongoing support to the UK’s operational nuclear power station portfolio and is well positioned to benefit from the renaissance in the nuclear industry on the back of recently announced government plans to build new nuclear power stations.
LDC is keen to support management’s strategy of building the company’s market position within the civil nuclear market and naval defence sector through both organic and acquisitive opportunities.
The business has been a key OEM supplier to the nuclear industry since the 1950s, supplying bespoke design, testing, manufacture, assembly, and installation services in relation to electro-mechanical equipment and components operated in environments where radiation shielding is necessary.
Having achieved 18 million of sales in 2008, NESL is forecast to report sales of 25 milliom in 2009.
The business was founded in 2003 by existing chief executive Brett Cooper following the acquisitions of the Rolls Royce Nuclear Engineering Services business and the Special Purpose Equipment Division of the NNC (formerly the National Nuclear Corporation).
“This transaction underpins NESL’s overall growth and development strategy whilst delivering financial backing to realise our full potential within the market place,” says Cooper. “It brings a diversity of knowledge and experience to the board outside of our traditional arena whilst providing a platform for growth. We are delighted to have secured the backing of LDC and look forward to the financial and strategic support that that their investment will bring to the business.”
Chris Hurley, investment director at LDC led the transaction, along with colleague Alistair Pendleton and both will join the board with immediate effect.
“We are delighted to be investing in NESL in order to drive future progression,” says Hurley. “LDC has a proven track record of investing within the industrial sector and we remain firmly committed to working with innovative engineering companies, especially those that continue to contribute to the Midlands’ manufacturing and industrial base. NESL is a high quality business and operates in a highly attractive market place which is forecast for continual growth – this is particularly pleasing, especially given the uncertainties of the current economic environment.
“The business has strong barriers to entry and has positioned itself at the heart of the nuclear decommissioning programme at Sellafield – in our opinion, this solid position, together with an ambitious organic and acquisitive growth strategy, should mean that the business remains well placed to exploit every possible opportunity to ensure future success.”
This is LDC’s second investment this week; the firm put up 17 million for the MBO of Cranswick Pet & Aquatics.
D.C.