NVM Private Equity (NVM) has completed the £7.5m management buy-out of Silverwing Group funded through a combination of equity and bank debt from RBS. NVM invested a total of £6m.
The company develops and manufactures a wide range of Non Destructive Testing (NDT) solutions which inspect storage tanks, vessels and pipework for corrosion and wall loss specifically for the petrochemical industry.
NDT inspections are designed to prevent accidents, reduce costs, improve product reliability and limit environmental impact. One of the highest profile oil tank failures in recent history occurred in 2005 at the Kallo oil storage facility in Belgium. A tank holding 37,000m3 of crude oil began leaking as a result of undetected corrosion on the floor of the container. Companies must now demonstrate to regulatory bodies that their facilities and systems operate effectively — both in terms of functionality and safety. This is one of the key drivers for growth within Silverwing’s market.
Silverwing was founded by Simon Packer in 1983 as a service inspection company. By 1992 the company had manufactured its own Magnetic Flux Leakage (MFL) floor scanner used to detect under floor corrosion in large petrochemical storage tanks. The global demand for the product encouraged Silverwing to develop its design further to produce what is now the world’s leading MFL mapping floor scanner.
In 2000, the company restructured under the name Silverwing (UK) and established Silverwing Middle East LLC in 2006 followed by Silverwing Africa PTY in 2009. As part of the management buy-out the three businesses will be brought under one umbrella company.
Silverwing is now a recognised brand within the international tank storage market, so is ideally placed to launch further products across different industries. Since 2006 it has successfully increased its revenue by 244%. Silverwing is headquartered in Swansea, Wales and currently employs 35 people in the UK and 27 in Dubai and South Africa.
Wayne Woodhead, Managing Director of Silverwing:
“Silverwing is well-placed to take advantage of the international demand for our advanced NDT systems. With the support of NVM we can now develop integrated solutions rather than individual products and meet the needs of a range of corrosion mapping applications. The growth in infrastructure across emerging markets in Asia, Africa and the Middle East is driving demand for these types of solutions, as well as increasing health, safety and environmental legislation in established markets. NVM were our chosen partner as their team understands the needs and potential of technology-led manufacturing businesses and supporting management through a buy-out process”
James Arrowsmith, Director of NVM:
“Despite the global economic downturn, the NDT market continues to flourish. Silverwing is therefore on the right path to deliver growth, driven by a highly experienced and passionate management team. Wayne has extensive expertise in this sector and successfully created value for Sonatest – a firm he previously managed. He has recognised a demand for a wider range of products to reach out to a diverse customer base. It’s an exciting time for Silverwing and we look forward to supporting Wayne and his team through their next stage of development.”
NewCo: Transcend Corporate Finance – Ian Curtis (lead adviser), Eversheds – Jon Gill and James Trevis (legal), BDO – Graham Elsworth and David Billington (financial due diligence), Calash – Iain Gallow (commercial due diligence) , Mercuri Urval – Richard Edmondson (management due diligence)
Vendor: Parry & Co – Bill Parry (legal)
Management: The Wilkes Partnership – Rick Smyth (legal)
Bank (RBS): Jonathan Roberts – RBS (Relationship Manager), Hugh James – Dominic Marshall (legal)
Notes to editors
NVM Private Equity Limited (NVM)
is independently owned with over 27 years’ experience of investing in unquoted UK businesses. NVM is a generalist investor, managing over £220m of funds, and is differentiated by having executives living and working in regional business communities throughout the UK. NVM seeks investment opportunities in UK businesses which have the right mix of growth potential and market vision. They may be looking to grow organically, acquire another business or secure a management buy-out. Typically, NVM looks to invest between £2m and £10m in each transaction. www.nvm.co.uk
For further information please contact: NVM