Equity house ‘success’ as it sells stake in drilling firm

Endless described its investment in Barnsley-based Amco as one of its most successful ever.

Following their exit from Amalgamated Construction, which was sold last month to Leeds-based Renew Holdings, the departing members of the management team have completed two more transactions by acquiring Endless’s stakes in Amco Drilling and Amco Developments, in deals which value the businesses at £14m.

Before the sale to Renew Holdings, the Barnsley-based Amco Group had three businesses: Amalgamated Construction, Drilling and Developments.

All of these businesses were owned by Leeds-based Endless and the management following a buyout in 2008.

Amco Drilling is a big provider of drilling services across West Africa. Amco Developments is a property development company specialising in commercial, leisure and retail developments in the north of England.

It was involved in building apartments in Arundel Street, Sheffield, and the development of the old Gordon Lamb site, off Ecclesall Road, which is also in Sheffield.

These two transactions complete Endless’s exit from its investment in Amco and bring to an end the partnership with management, which started three years ago when Endless backed them in the original management buyout (MBO) from Amco Corporation, which is now Billington Holdings.

Darren Forshaw, a partner at Endless, led the deals with help from Aidan Robson, investment director, and legal advice was provided by Richard Naish and Peter Considine, of Walker Morris.

Mr Forshaw said yesterday: “Our investment in Amco has proved to be one of the most successful we have ever made, delivering market-leading returns that we are extremely proud of. The sale of Amalgamated Construction to Renew, last month, provided the platform to conclude the sale of the other Amco businesses to the management team, and I know that all parties are delighted with the outcome.”

Legal advice to management was provided by Hill Dickinson in Sheffield.

The team was led by corporate partners Neil Thompson and Paul King. Hill Dickinson also acted for Endless and management in the deal with Renew.

Corporate finance, deal structuring and tax advice to management was provided by BHP Corporate Finance.

The BHP team was led by David Forrest, Don Gray and Zoe Roberts.

Banking facilities for Amco Drilling and Amco Developments were arranged by David Hunt, Relationship Director of Lloyds Bank Corporate Markets in Sheffield. In 2008, Endless provided the bulk of funding for the £9.4m buyout of the four companies from Amco Corporation.

Endless provided funds for an initial £8m payment, with £1.4m to follow, while working capital came from the Royal Bank of Scotland. David Jackson, who had been group executive director at Amco Corp, and Ian Swire, group finance director, led the buyout after Amco Corp decided it wanted to concentrate on its core activities in the steel industry.

Last month, it was revealed that Amco is expected to have earned revenues of £75m in 2010, and it has a £100m-plus order book.

Last month, Renew Holdings described its acquisition of Amco Group as “transformational”.

Renew paid £19.8m in cash up front for the business, and will pay another £7.1m deferred sum which will not require more cash.

Amco’s 700 staff will grow Renew’s workforce to about 2,100.

Its work does not overlap with Renew’s existing operations.

Speaking on behalf of the Amco management team, Ian Swire said yesterday: “I am extremely proud to have been involved in the Amco success story for over 20 years.

“These are fantastic Yorkshire businesses and I am confident that they will all continue to thrive under their new ownerships”.

Endless fact file

Endless is an independent UK-based private equity house, which specialises in the provision of financial investment and hands-on turnaround expertise.

Endless has invested around £155m in more than 30 transactions during its first five years. Many of the investments have been completed in less than 28 days.

Its main focus is investment in turnarounds and financial restructurings. It also buys non-core businesses and completes difficult management buyouts.

With funds under management of £300m, Endless has access to large levels of committed capital to support the companies in which it has invested.

Endless is currently investing Endless Fund II, which closed in February 2008 with total commitments of £164m, which were provided by institutional investors from across the US and Europe.