Global investment bank GCA Altium has advised Deep Sea Electronics (DSE) on the sale of a majority stake to Caledonia Investments plc (Caledonia), for a consideration of £162m.
The investment trust company Caledonia has acquired a majority stake in DSE, which is a manufacturer of controllers for diesel-powered electricity generators and intelligent battery chargers, as it looks to expand its global presence.
Founded in 1975, DSE already operates globally, providing products to support public sector infrastructure projects and defence applications, as well as diverse applications across industry sectors, including oil and gas, telecoms, construction, power distribution and facilities management.
The company has 170 employees and is headquartered in Hunmanby, North Yorkshire.
The investment will allow DSE to expand its global presence, and represents the largest initial investment by Caledonia’s Unquoted pool since its inception in 2011.
The shareholders of DSE were advised by GCA Altium’s Stuart Warriner, Dominic Orsini, Andy Battersby and Rob Liguz.
David Thomson, DSE’s managing director, said the deal means that the company’s Yorkshire-based staff have a fantastic future.
He added: “Caledonia Investments are the right partners. They have a long term view of investment.
“With Caledonia’s financial support, flexibility and long-term investment horizon, I am confident that we can build on DSE’s well-established reputation for product quality, technical capability and customer service to take advantage of the significant growth potential in our chosen markets.”
Mr Thomson said the firm had “minimal exposure” to Brexit and it also had an extremely high staff retention rate.
Ed Sheader and Stan Archer, who had been the co-owners of DSE for almost 40 years, said: “We were keen find a buyer who would be committed to the long-term development of the business and secure employment opportunities for the workforce.
“We are delighted to pass the company on to Caledonia, with its backing by the Cayzer family and reputation as a long-term, supportive investor, and wish them and David Thomson and his team every success in the future.”
Addleshaw Goddard provided legal advice to the vendors, while commercial and financial due diligence advice were respectively provided by CiL and PwC Leeds. Taylor Wessing and PwC London respectively provided legal and financial due diligence advice to Caledonia, while Deloitte provided tax advice and Wyvern Partners provided debt advice.
Park Place Corporate Finance and Squire Patton Boggs advised management.
Caledonia Investments is a self-managed investment trust company listed on the London Stock Exchange with net assets of approximately £2.0bn. The company maintains a concentrated portfolio of international quoted, unquoted and fund investments.
In the unquoted arena, Caledonia typically seeks to invest £25m to £100m in private companies, either on a majority or minority basis, providing growth capital to support double-digit operating margins.