NVM invests £5m in oil and gas technology business, Arnlea

NVM Private Equity (NVM) has supported the management buy-out of Arnlea Systems and NexusAB with £5 million of funding. As part of the investment package NVM has provided the capital to fund product development and international expansion.

For over 20 years Aberdeenshire based Arnlea Systems has delivered mobile technology solutions for clients working within the oil and gas sector to assist with asset management, in particular equipment and materials tracking and inspection. Its partner company, NexusAB, provides integrated quality assurance and technical inspection technology and services. Both businesses will become part of the Arnlea Holdings group going forward.

Arnlea targets the global oil and gas exploration and production market, also referred to as ‘upstream’ oil and gas. Both companies help oil and gas field operators and drilling companies to optimise their inspection and repair processes, ensure compliance with industry regulations; and manage assets during their entire lifecycle.

Arnlea is experiencing an increase in demand globally for its product suite, driven by a growth in asset security, health & safety, environmental concerns; and a tightening of compliance and regulation post the Macondo oil spill. BP is among Arnlea’s extensive blue-chip customer base.

Arnlea’s Managing Director, Allan Merritt, joined the business in early 2013 and has since built a new, high quality executive management team around him. He was instrumental in securing a five year contract with Total SA, which will bring together Arnlea’s product portfolio into a single ‘Enterprise’ solution that is being developed on the latest technology platforms.

Allan was already well-known to NVM having taken on the role of Chairman on the board of NVM-backed Abermed, a provider of occupational health and remote medical services. He successfully led the Abermed management team until the business was subsequently sold to International SOS in 2009.

Allan Merritt, Managing Director of Arnlea Systems, comments: “I am very excited about the Arnlea opportunity. The demand for our inspection and tracking solutions is growing rapidly, so the business is perfectly poised, with established and new products being delivered into an industry sector where we already have a market-leading position. We have an excellent team, which provides a solid base upon which to build. I am really looking forward to working with NVM again and I am confident that, with the continued support and enthusiasm they have already shown, we will succeed.”

Mauro Biagioni, Director of NVM Private Equity, comments: “We are delighted to back an experienced and high quality management team from two businesses that have the potential to create a large international company. Allan and the team delivered significant growth in 2013, more than doubling the group’s revenues. This demonstrates the capability of the team to take their business forward to the next stage, and we look forward to supporting them on this journey.”

Rod Wilkinson and Chris Wilson from KPMG’s Newcastle-based corporate finance based team advised the management team.
Rod Wilkinson, head of KPMG’s Corporate Finance team in the North East, comments:
“KPMG were delighted to advise on this successful transaction. Through combining two quality businesses, Allan and the team have created a fantastic platform for growth and now, with the support of NVM, have the backing to significantly expand Arnlea’s portfolio and international footprint. This transaction represents another great example of how growth capital is being used to drive accelerated growth for a number of SME businesses in the Oilfield Services sector.”


KPMG (Management advisers) – Rod Wilkinson, Chris Wilson
Bond Dickinson (Newco lawyers) – Jamie Pass, Iain Pritty
Blackwood Partners (Management lawyers) – Judith Quinn, Ross Fair
Hall Morrice (Management tax advisers) – Bob Bain 
Deloitte (Financial and tax due diligence) – Matt Henderson, Shaun Reynolds
Armstrong Transaction Services (Commercial due diligence) – Tom Raymond
Continuum (Management due diligence) – Steve Wycherley, Russell Thackeray
Aon (Insurance due diligence) – John Donald
Intuitus (IT due diligence) – Adrian Astley-Jones

Arnlea is the leading asset management operator in the North Sea and has supported companies operating in hazardous and harsh areas for more than 20 years to maximise operational efficiency and effectiveness. The company’s suite of mobile and radio frequency identification tracking technology, used by the oil & gas, petrochemical and food & drink industries, enables users to manage and monitor their assets.
www.arnlea.com www.nexusab.com

NVM Private Equity is independently owned with nearly 30 years’ experience of investing in unquoted UK businesses. NVM is a generalist investor, managing over £290 million 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 £2 million and £10 million in each transaction. www.nvm.co.uk

For further information please contact:
Liberty Bollen (NVM: PR & Marketing) – 0118 951 7017 liberty.bollen@nvm.co.uk
Mauro Biagioni (NVM: Director) – 0191 244 6025 mauro.biagioni@nvm.co.uk
Martin Slowey (Arnlea: Business Development Director) – martin.slowey@arnlea.com