Amco Group Limited
www.amco.co.uk
Transaction Type: Management Buyout
Status: Current Investment
Sector: Construction, Engineering, Plastic Manufacturing & Property Development
Investment Date: April 2008
Endless Contact: Aidan Robson
THE BUSINESS
Amco Group Limited was formed to acquire Amalgamated Construction, Amco Drilling, Amco Plastics and Amco Developments in this £9.4m buyout. Amco Group Limited continues to operate from headquarters in Wakefield and three key operational sites in Barnsley, Warrington and Wath upon Dearne.
Amalgamated Construction accounts for around £80m of the £100m turnover of the new group and originally focused on providing underground contracting services to the coal mining industry. As that sector declined, its reputation for delivering complex engineering solutions in a highly regulated health and safety environment generated new opportunities in the civil, rail, and engineering sectors.
As a result of this Amalgamated Construction developed specialist skills in a wide array of areas including rail maintenance, tunnel refurbishment and mechanical engineering and has undertaken key projects for Network Rail, National Grid, Mersey Tunnels, Magnox, United Utilities, LaFarge and Scottish & Southern Energy. Significant projects include the £13m improvements to the Mersey Queensway Tunnel to provide emergency escapes, the £2.5m refurbishment of Monkwearmouth Bridge, Sunderland and the £2.5m refurbishment of a swing bridge and bascule bridge in Exeter.
At the time of the buyout, it was completing the £6m Dock Street tunnel contract for Dundee City Council and, on behalf of Network Rail, was undertaking a programme of major improvements to the Severn Rail Tunnel. The business also operates three framework contracts for minor civil works for Network Rail across a number of their territories, which together employ over 80 staff and 300 operatives.
Amco Drilling provides specialist exploratory drilling services to mining companies in Guinea and Mauritania in West Africa, including South Africa’s leading gold producer, AngloGold Ashanti. Amco Plastics manufactures plastic extrusions, flexible ducting and children’s play products. Amco Developments is a property development company specialising in residential, commercial and industrial developments in the North of England.
INVESTMENT COMMENTARY
The businesses acquired in the buyout were non-core operations owned by Amco Corporation Plc. The acquisition package put forward by Endless provided an all encompassing solution to the vendor, which wanted to concentrate on its core operations, and facilitated a complex buyout. The target businesses have delivered steady and strong profits over recent years and their markets present significant opportunities over the foreseeable future.
In particular, Amalgamated Construction is seeing significant growth opportunities in its construction and rail operations and Amco Drilling is expanding as the macro demand for gold increases. The investment by Endless will allow the management teams to pursue new expansion opportunities both in the UK and overseas.
Endless was advised by Walker Morris (Richard Naish & Peter Considine) and PricewaterhouseCoopers LLP (Darren Bryant & Chris Pennington) with Vincere LLP (John Dewhirst & Tony Lumb) providing financial support. Halliwells (Neil Thompson) advised the MBO team. The Royal Bank of Scotland plc provided working capital facilities (Andrew Barraclough & Jeremy Bell).
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