Ashtead Technology has acquired fellow north-east energy services firm ACE Winches in a multi-million-pound deal.
The subsea equipment rental and solutions provider purchased ACE from its founders Alfie and Valerie Cheyne via a total cash consideration of £53.5 million for its parent firm Rathmay Limited.
Mr Cheyne will stay on as an advisor for 12 months, helping with the handover and integration period.
The acquisition sees Ashtead Technology’s headcount increase from 320 to over 520, with around 400 employees based in Aberdeenshire.
Ashtead says that the deal will be funded by drawing on the group’s “revolving credit facility” and is expected to be materially earnings-enhancing by the end of next year.
The firm announced its strongest-ever results in September with a 57.1% increase in revenues, driven by offshore renewables and offshore oil and gas.
Half-year revenues totalled £49.8m, up 57% on the same period last year, on adjusted pre-tax profits of £14.3m, up 89%.
Ashtead Technology (AIM: AT.) chief executive, Allan Pirie, said: “Both businesses have deep-rooted history and heritage in Aberdeenshire whilst delivering for our customers globally.
“As a combined business, we will continue to strengthen our capabilities in Aberdeenshire whilst leveraging our strong international footprint and infrastructure to drive continued international expansion of our business and deliver Ashtead Technology products and services to a larger global customer base.”
© Supplied by Ashtead TechnologyRBC analyst Victoria McCulloch has commented: “Underlying trading growth reflects strong demand in the current cycle by its customers, and we expect this deal to be welcomed today by shareholders. ”
Ace Winches, a fellow north-east business, supports the installation, inspection, maintenance and repair, and decommissioning of offshore infrastructure, something Ashtead says is “highly complementary” to its potfolio.
Mr Pirie added: “While the business predominantly serves the oil and gas industry, we see a significant opportunity to redeploy the asset base in offshore renewable markets as well as further internationalising our business.
“The transaction serves to reinforce our strategy of expanding our fungible fleet and range of offshore services solutions to meaningfully enhance our customer offering, and in turn grow further market share.
“We look forward to welcoming new colleagues to the Ashtead Technology team and capitalising on the wealth of in-house expertise they will bring to the Group.”
ACE Winches is expected to generate revenues of around £43.4m in 2023, adjusted Earnings before interest, taxes, depreciation, and amortization (EBITDA) of £13.7m and adjusted EBITA of £10.0m.
Ace Winches reported strong financial results in 2022 with pre-tax profits surging to £13.2m, from £4.2m a year earlier.
Earnings before interest, taxes, depreciation and amortisation rose to £16.1 million, from £7.6m in the previous 12 months, with turnover skyrocketing by 49% to £42m.
Ace said its blockbuster figures were driven by decommissioning activities in Brazil and renewables projects in Europe, the US and Taiwan, as well as new business from existing clients in more traditional energy markets.
© Supplied by Fifth RingAlfie Cheyne, founder and chairman of ACE Winches commented: “Ashtead Technology is an outstanding business with a first class reputation and the clear synergies between both companies will give us the platform required to accelerate our growth.
“As well as creating a tremendous opportunity for our people, becoming part of Ashtead Technology will enable us to expand our existing capabilities and international footprint in key regions including the USA and the Middle East where Ashtead Technology has an established local presence.
“We are thrilled to become part of the Ashtead Technology team and see it as the perfect home for the next chapter in our growth story.”
Previous Ace Winches ownership
In 2021 Ace Winches was sold by Aberdeen’s Balmoral Group following a spat between the two in court.
Balmoral built a majority 70% stake in the Aberdeenshire deck machinery specialist from 2017-2019.
Mr Cheyne and his wife Valerie accused Balmoral of abusing its position as controlling shareholder and of mounting a campaign to “marginalise” them and force the sale of their remaining 30% stake at below market value.
Balmoral denied the allegations as “unduly suspicious and conspiratorial”, however, a judge turned down a request to dismiss an “unfair prejudice” petition from the Cheynes.
© Michal WachucikFollowing the falling out between the two organisations, the Cheyne family exercised an option, in line with its original agreement, allowing it to buy ACE Winches back.
Alternative lender ThinCats gave £13.5 million to Alfie Cheyne to buy back his firm from Balmoral at the time.
ThinCats, which funds small and medium-sized enterprises with loans from £1 million up to £15m, said its financial package for the Cheyne family helped them to repurchase the shares.
Ashtead Technology acquisition spree
© Supplied by Ashtead TechnologyLate last year Ashtead Technology picked up ownership of Aberdeenshire offshore equipment rental firm Hiretech for £20 million.
Hiretech was Ashtead’s seventh acquisition in five years and the deal followed the group’s takeover of WeSubsea in September 2022.
In November 2021, Ashtead reached a market valuation of nearly £130m from its initial public offering (IPO) on the Alternative Investment Market (AIM) of the London Stock Exchange.
Shareholders pocketed more than £36m through the move, with gross proceeds of £15m going to the company.
At the time of its IPO the company said it had agreed a placing of 31,832,800 ordinary shares at 162p per share.
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