Indian group in £9m deal for DavyMarkham

INDIAN conglomerate IVRCL has entered the UK market with the acquisition of Sheffield engineering firm DavyMarkham in a deal worth more than £9m.

The sale represents a success for Endless, the Leeds-based distressed investor, which bought the loss-making business for a nominal sum in 2007 and transformed it into a profitable enterprise through investment and strategic support.

The deal could see South Yorkshire become the hub of the Indian giant's engineering and construction operations in the UK.

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Garry Wilson, a partner at Endless, told the Yorkshire Post: "IVRCL see this as a platform in the UK. You might see them doing more acquisitions in the UK with DavyMarkham as the headquarters or base for those acquisitions."

Mathew Deering, a director at Endless, said: "This transaction represents a 10.5 times return on our original investment and is significantly ahead of our investment plan.

"This was an extremely challenging turnaround given the extent of losses inherited and the recent recession, but we were always confident that DavyMarkham had a good underlying business and great prospects in its end markets, in particular the nuclear power sector."

180-year-old DavyMarkham is involved in the design, manufacture and assembly of large equipment used in the mining, quarrying, power generation, oil, gas and nuclear sectors.

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The 20m-turnover company services international markets with tunnelling and mine hoisting equipment and it has the capability of lifting individual structures weighing up to 350 tonnes.

It has supplied the largest-ever steel mill stand for China, tower saddles for suspension bridges in Hong Kong and San Francisco, cutter heads for Niagara Falls hydroelectric scheme, railroad tunnels in China and an irrigation project under a tiger reserve in India.

In the UK, the company has worked on the Channel Tunnel, Heathrow's control tower, the Thames Barrier, Gateshead Millennium Bridge and British Coal mine winders.

Kevin Parkin, the managing director of DavyMarkham, who will remain with the business, said: "It is great news for DavyMarkham's customers, employees and suppliers, since IVRCL is financially very strong, is highly growth orientated and dedicates itself to continuous improvement in all fields of its business."

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He added: "DavyMarkham was on the verge of closure four years ago, but with the financial support of our buyout partners, Endless, we have been able to turn around the business and make it an attractive acquisition prospect.

"Working closely with the workforce, management, unions, suppliers, the bank and local council, we have introduced huge improvements and efficiencies into the business and we are now facing an exciting future."

Endless retains ownership of the DavyMarkham business park, which is home to the historic engineering firm and 13 other businesses.

Deloitte and Nabarros advised Endless and the management on the sale, while Irwin Mitchell advised IVRCL.

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Dan Renton, of Deloitte, said: "The combination of DavyMarkham and IVRCL provides a fantastic opportunity for this Yorkshire manufacturing icon to grow and prosper.

"This deal is an excellent example of how a carefully controlled global mergers and acquisitions process can identify the right purchaser, even when they are as far away as India.

"In this economy more businesses are looking harder and further afield to get the right deal and the strategic best fit."

It is understood that there were four or five interested buyers.

Talent for turnaround

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It has been a very busy few months for Endless. As well as selling DavyMarkham, the Leeds-based turnaround firm has sold pharma firm Excelsyn to a US plc, netting a four-times return on its investment.

The Yorkshire Post can reveal that Endless has also sold Brighton-based British Bookshops, a 40-store retail chain, to the management team for 3.6m.

"It was heavily loss-making when we acquired it in May last year," said partner Garry Wilson. "After a rapid restructuring of the business, it is now on track to make about 250,000 of profit this year."

Yesterday the company announced it has bought Lancashire-based schoolwear supplier Truetex, which supplies products to more than 2,000 schools and directly to parents.

It was unsuccessful in its bid for Ethel Austin, the retail chain which went into administration last week.

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