Deal enables private equity house to fund MBO at niche Stockport firm
Private equity house Westbridge Capital has backed the management buyout of Stockport-based APEM Ltd, an independent environmental consultancy specialising in the aquatic environment and remote sensing.
The deal has seen WestBridge invest £9.8m in a combination of equity and loan notes, which will support the company’s growth ambitions as it develops complementary service lines to support its clients’ needs.
The transaction has allowed the business founder, Dr Keith Hendry, to retire and pursue his long-standing non-commercial interests.
Dr Adrian Williams and Dr Stuart Clough, who have been instrumental in growing the business over the past decade, will continue to take the company forward.
They are supported by a broad and experienced executive team, who will benefit from the wider share ownership that this transaction has allowed.
Established in 1990, APEM provides environmental consultancy, laboratory services, field surveys and remote sensing capabilities to a range of sectors including water, power, engineering, construction and transport.
Services include water quality and pollution analysis, species and habitat surveys, and aerial surveys, all of which assess the potential impact of developments and operations on the surrounding environment.
APEM also provides ongoing monitoring and consultancy to minimise environmental damage.
The business is considered the thought-leader in its niche with clients that include blue chip companies, government bodies and regulatory authorities, such as the Environment Agency and DEFRA.
Based in Stockport and with a turnover of £10m, APEM has eight offices across the UK, one in Germany and one soon to open in the USA, all supported by more than 100 highly qualified staff.
The transaction was led by Guy Davies and Valerie Kendall, founding partners at WestBridge, who will both join the board, supported by investment managers Edward Minton and James MacLeay.
Valerie Kendall said: “This is exactly the type of authoritative business we like to invest in and, most importantly, the chemistry with the team feels right. We are very much looking forward to working with Adrian, Stuart and their colleagues, who are acknowledged experts in this fast-growing niche sector.
“Although APEM is already successful, we have collectively identified areas of untapped potential to help grow the business further, both organically and through acquisition.”
Guy Davies added: “APEM is a well-respected and well-run business providing a number of essential services that are resilient to market forces and underpinned by government policy and regulation, which is becoming increasingly stringent.
“The UK Government is committed to delivering its 25-year environment plan, which includes the delivery of clean and plentiful water, while the UK must comply with EU environmental regulations after Brexit, all of which means that demand for environmental consultancy is set to grow.
“We are also delighted with the work undertaken by the Dow Schofield Watts team, led by Peter Barkley, who supported WestBridge with this transaction. Their strong environmental consulting M&A credentials assisted us greatly.”
Dr Adrian Williams, managing director at APEM, said: “We are delighted to conclude this deal. As well as enabling us to develop a wider suite of specialist services across the UK, it allows us to exploit the huge growth potential presented by the US offshore wind market.
“We already have a strong foothold in the United States, having won four major offshore wildlife photography survey contracts in the last couple of years, but there is much more to come.
“We were impressed with the WestBridge team and feel our respective strengths herald an exciting future.”
Yorkshire Bank provided senior lending and working capital facilities to the group. Jane Hartley, senior director, said: “The team at APEM are influencers in their field – their expertise and approach is extremely well-respected and there is huge potential to take the business forward.”
Tom Kelleher, partner at Capital Law, said: “We have had a strong relationship with WestBridge over many years and we have enjoyed supporting them on this transaction, our ninth deal for WestBridge.
“In APEM, WestBridge has again backed impressive individuals and a great business. We have no doubt that the WestBridge team, together with Adrian and Stuart, can build upon the existing success enjoyed by APEM and we look forward to working with them to support the future growth of the business.”
Peter Barkley and Thomas Dutton of Daresbury-based Dow Schofield Watts Corporate Finance provided bid support and debt advisory to WestBridge.
Peter Barkley said: “We are delighted to have assisted WestBridge in making this investment and to have worked with them and management in developing their joint vision for the future of APEM.
“WestBridge’s experience and ambition combined with APEM’s outstanding reputation is a great fit and we look forward to seeing the business continue to grow.”