Cape swoops for tank storage specialist in multi-million pound deal

INDUSTRIAL services group Cape announced today it has acquired a major provider of storage tanks, gasholders and heat exchangers to the energy and steel markets in a deal worth nearly £40m.

The total consideration for the acquisition of Motherwell Bridge, which has its gas division based in Yorkshire, amounts to £37.65m on a cash free, debt free basis, comprising an initial cash consideration of £34m, debt of £900,000, deferred consideration of £1.25m contingent on a key contract win and up to £1.5m related to future performance.

The acquisition will be funded from the group’s existing debt facilities.

Motherwell Bridge, headquartered in Lanarkshire, Scotland, is recognised internationally as a leader in the specialist storage tank market. The business has a global reputation and has historically delivered a significant number of storage tanks around the world. Motherwell Bridge also provides and maintains gasholders for the global steel industry, and maintains and refurbishes heat exchangers primarily in the UK continental shelf.

Motherwell Bridge’s gas division, Clayton Walker Gasholders, is based in Wakefield.

The management team at Motherwell Bridge will remain with the business post acquisition.
Motherwell Bridge employs around 300 people, primarily located in the UK. For the year ending December 31 2012, Motherwell Bridge generated EBITA of £4.8m on a revenue of £34.6 m. Its gross assets as at 31 December 2012 were £42.4m.

Joe Oatley, CEO of Cape said: “The acquisition of Motherwell Bridge is in line with Cape’s strategy to broaden our portfolio of critical industrial services. Motherwell Bridge has tremendous expertise, reputation and brand recognition in the oil and gas storage tank market, including a market leading position in the UK and we expect to accelerate Motherwell Bridge overseas growth through Cape’s international footprint. By combining the strengths of Cape and Motherwell Bridge we are uniquely able to provide a complete tank maintenance solution to clients in the oil and gas market.”

Partner Christian Mayo and director Giles Taylor from KPMG’s corporate finance team in Leeds advised management at Motherwell Bridge and Kuwait Finance House on the transaction.

Mr Taylor said: “Engineering firms that have ‘cut their teeth’ in the oil and gas markets continue to attract significant interest from the international energy community and Motherwell Bridge is no exception. The deal is illustrative of the ongoing consolidation in the global oil and gas industry as major players look to broaden their portfolio to capitalise on growing demand for specialist engineering products and services.”