Non-Core Acquisition / Turnaround
DavyMarkham is a heavy-engineering business involved in the design, manufacture, machining and fabrication of large metal structures. The DavyMarkham trade name has a 180-year history in Sheffield engineering. The business had previously operated under the ownership of industrial conglomerates with limited management support or investment in what was often regarded as a non-core division. As a result the company had a long history of trading losses despite excellent experience and client credentials in undertaking large design, manufacturing and installation projects.
The business was one of the last remaining assets in an industrial group which was winding-down its European industrial operations. There was little appetite from trade buyers or Private Equity houses towards the business but Endless identified a solution which worked for all stakeholders. Endless structured a deal to acquire both the share capital of DavyMarkham and the extensive real estate site it part-occupied under lease from the parent Group.
Despite the economic downturn and subsequent reduction in investment in large capital projects around the world, the business delivered consistent profitability each year and increased its strong order book. The business also positioned itself to take advantage of strong growth opportunities in the nuclear power sector.
DavyMarkham won numerous awards and was recognised for its engineering excellence and expertise. These awards included:
- The Creative Sheffield, Sheffield Champion Award – Winner, Sheffield Business Awards 2009
- The Barclays Outstanding Business of the Year Award – Winner, Sheffield Business Awards 2009
- SME Manufacturer of the Year – Highly Commended, The Manufacturer of the Year Awards 2009
- Waterways Renaissance Awards 2009, Historic Environment – Commendation, British Urban Regeneration Association
- The Halliwells Excellence in International Trade Award – Winner, Sheffield Business Awards 2008
- The Wake Smith Manufacturing Award – Winner, Sheffield Business Awards 2008
- The Historic Bridge & Infrastructure Awards 2007 – Commendation, Institute of Civil Engineers
The property asset has benefitted from significant investment from Endless in redeveloping and regenerating the site to create a thriving Business Park in Sheffield, with twelve new tenants introduced on the site, producing an attractive rental stream.
We demonstrated our willingness and ability to complete a transaction where others prospective buyers failed to see a solution, facilitating an exit for the vendor. We were able to provide a structured solution to acquire the heavily loss making business and the real estate asset at a value attractive to the Vendor.
We were instrumental in driving both change at the Company and to the real estate. This is a prime example, in our view, of how management teams and Private Equity can combine to make a real difference to a company and all of its stakeholders.
In February 2010 we sold the business to the Indian engineering and construction giant IVRCL. IVRCL is amongst the leaders of the Indian infrastructure industry, with a group turnover exceeding US$1 billion. A major part of the investment rationale for DavyMarkam was to position the business as a unique and strategic asset that would attract foreign trade buyers. We were successful in doing this and had significant interest in the Company leading to a high Enterprise Valuation and delivering a 10.5 times return on our original investment.
"DavyMarkham has been through a significant turnaround over the last 18 months and we have been supported all the way by our skilled and dedicated workforce. The investment and strategic support from Endless will allow the business to grow from strength to strength. This is great news for both the employees of DavyMarkham and South Yorkshire in general, and Duncan [Hay] and I are pleased to be part of it."
Kevin Parkin of DavyMarkham - Jul 2007
"They are clear leaders in the turnaround market. Support, flexibility and continuous encouragement are superb hallmarks of Endless. We have been delighted to work with the Endless Team and can only recommend that everyone considering an MBO engage with Endless – you will not be disappointed I can assure you"
Kevin Parkin of DavyMarkham - Feb 2010