MBO creates new North East based engineering business

A new advanced engineering business has been established in the North East following a Management Buyout (MBO) of a UK division of a multinational organisation.

Led by Michael Baker and Paul Seccombe, a pair of experienced engineers from the region, they have acquired the Power Generation and Aerospace Solutions (PGAS) division to establish GadCap Technical Solutions Ltd.

As part of the MBO, Michael and Paul have taken on the PGAS division premises in Washington, Tyne & Wear, where it designs and manufactures market-leading bespoke engineered products for the power generation and aerospace industries.

The PGAS division is the only business in the world providing a steel-based, mineral product utilised in Advanced Gas Cooled Nuclear Power Stations with long-standing contracts to manufacture the solution for the UK industry.

GadCap through its CapaciSense product line is also a market leader in the design and production of bespoke sensors, which are used in the measurement of operational gas-powered turbines to increase efficiency and safety.

Having worked in the division since 2002 and as the incumbent management team, the new directors will apply their experience and expertise to deliver a programme of organic growth.

To support the MBO, the directors appointed RG Corporate Finance, which in addition to advising on the purchase of the division also assisted with securing funding for the deal that has been provided by London-based Shard Credit Partners.

Alastair Brown, CEO of Shard Credit Partners commented: “We are delighted to have been selected as financing partner to back this high quality MBO.  This will be our first investment in the North East, and we look forward to working with RG to help the MBO team execute their organic growth strategy over the coming years.”

Advising the directors of GadCap from RG Corporate Finance was Head of Corporate Finance Carl Swansbury and experienced Corporate Finance Manager, David Nixon. Tax advice was provided by RG Business Tax’s Simon Whiteside and Simon Hopwood.

Legal advice to the directors was provided by Watson Burton’s Duncan Reid, Paul Wigham, Marc Allison and Kirsty Adamson, with specialist real estate and employment support from Olivia Brown and Kerry Waters. Andrew Madden and Kerry Gibbons at Gateley plc acted as legal advisers to Shard Credit Partners.

Michael Baker said: “Paul and I are very proud to establish GadCap Technical Solutions Ltd, building on the solid foundations of the previous organisation.  We have created a strong niche in key markets through the creation of innovative engineered-solutions, which we have ambitions to expand in our existing markets and new geographies.”

Paul Seccombe said: “Working with Shard Credit Partners we are confident in our ability to grow the business and maximise on our position at the heart of the North East and its engineering pedigree.  We have a very talented team of engineers and manufacturing personnel, producing advanced and bespoke products, which we aim to expand as we develop the business further.”

David Nixon, CF Manager at RG Corporate Finance, said: “Having led the PGAS division for a number of years, Paul and Michael were ideally-placed to take on the operation from its owners through an MBO.  They have been instrumental in the success of the operation to date and had the autonomy to develop and grow the business, which they have done very successfully.

“We are very pleased to have advised Paul and Michael on the acquisition and we look forward to working with them in the future. RG’s OutsourcedFD team has now been engaged to provide accountancy services and advisory support to the business going forward, and we look forward to helping the directors on their journey as they go about growing the business.”

Duncan Reid, head of corporate at Watson Burton LLP said: “It was a pleasure to work alongside Michael and Paul throughout the MBO process.  Their confidence in the business and their determination to grow a specialist engineering business in the North East will bring huge benefits to the region.”