Press Release
Entec Completes Management Buy Out
Issue date: 6 October 2005
Close Brothers Growth Capital backs £30m MBO of Entec from Northumbrian Water
Entec UK Limited today announces the completion of its management buy out from Northumbrian Water Group plc, backed by Close Brothers Growth Capital (CBGC), a provider of combined debt and equity funding. Entec operates in the rapidly growing environmental and engineering consultancy market and employs 700 staff and associates in 11 locations throughout the UK.
The MBO team is being led by Managing Director, Simon Armes-Reardon, Commercial Director, Douglas Morton, and Finance Director, Barry Canfield. Bill Crossan of CBGC will join the board of Entec as a non-executive director.
The £30 million deal is financed predominantly by way of a hybrid debt-equity funding package from CBGC with the management also providing equity.
Entec has a broad service offering and serves an impressive list of public and private sector clients across various industries. It is a leading company in its sector and is ranked highly in terms of reputation both by customers and competitors alike.
Entec’s largest office is in Gosforth, Newcastle and in the year to 31 March 2005 reported turnover of £42 million with earnings before interest and tax of £2.8m.
Both the management team and Entec Holdings were advised by the Deloitte Corporate Finance team in Newcastle. Ward Hadaway were legal advisers to Entec Holdings and the management team. Dickson Minto were legal advisers to CBGC.
Simon Armes-Reardon, Managing Director of Entec, said:
“The funding package put together by CBGC will help us to continue our intended growth and fits our needs while allowing the management team to retain a majority stake in the business. We look forward to welcoming them as an integral part of the Entec team. The MBO announced today is a key part of the strategy for the future development of the Company.”
Bill Crossan at CBGC commented:
“We are delighted to back Entec and its management team. This is the first investment from our recently-closed Fund II and we are pleased to be making the investment from that fund in a company with such exciting prospects as Entec.”
John Cuthbert, Managing Director of Northumbrian Water, added:
"We wish Entec well and look forward to continuing to work with them as a key supplier to Northumbrian Water Limited on environmental and engineering matters. This sale is in line with our strategy to focus on our core business of water and wastewater treatment."
For further information contact:
Simon Armes-Reardon Entec tel. 0191 272 6100
Bill Crossan CBGC tel. 020 7065 1140
or email info@entecuk.co.uk
Notes to Editors
Entec is one of the UK ’s largest environmental and engineering consultancies. The technical and business skills of over 700 staff and associates are dedicated to delivering strategic, technical and engineering solutions which bring commercial benefits to our customers at home and overseas. This know-how is based on over 60 years of consulting experience in the public and private sectors. Visit www.entecuk.com for further details of who we are and what we do.
Close Brothers Growth Capital, an investment arm of Close Brothers Group plc, was started in 1999 to provide combined debt and equity funding to UK SMEs. CBGC specialises in providing combined debt and equity investments to management buy-outs/buy- ins, companies requiring growth capital, secondary buy-outs. CBGC invests in mid-market situations in any sector and aims to be the only (or main) financial institution involved. CBGC looks for a UK business with a strong incumbent or incoming management team, a recognisable market position and a history of cash and profit generation.
Close Brothers Growth Capital provides innovative financing alternatives for SMEs through the use of a hybrid debt/equity product. The investment made by CBGC in a company takes the form of a tailor-made instrument combining the best elements of a secured loan with those of equity. The management team in an MBO or MBI typically retain a greater proportion of their company’s equity and benefit from significantly enhanced flexibility in the repayment of the funding package. Close Brothers Growth Capital is authorised and regulated by the Financial Services Authority.
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