Allan Merritt has led a £5.5million management buyout (MBO) of North Sea asset manager, Arnlea Systems which is expected to create 30 jobs.
Merritt expects the funding boost will treble the firm’s turnover to £15million by 2017 and double the size of its workforce to 60. The company also plans to open a second office in South East Asia in the next three years.
The deal, backed by NVM Private Equity, unites Inverurie-based Arnlea and its sister firm, NexusAB in Aberdeen, providing an exit for Mark Cavanagh, who acquired Arnlea from oil tycoon Ian Suttie’s First Tech two years ago.
The investment includes funds earmarked as growth capital for product development and international expansion.
Merritt, 54, who was executive chairman of Arnlea becomes managing director, alongside Jeremy Lai, finance director and Martin Slowey, business development director as the firm’s management team
Reading-based NVM has taken a minority stake in the firm.
Arnlea targets the global upstream oil and gas industry, helping operators, offshore floating systems and drilling companies to optimise inspection and repair processes, ensure compliance with industry regulations, and manage asset integrity.
“The NVM investment is a great opportunity for Arnlea; our business is now perfectly poised, as the demand for our inspection and tracking solutions grows rapidly,” Merritt said.
Mauro Biagioni, director of NVM Private Equity said the combined businesses “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,” he added.
KPMG Corporate Finance advised the management team.
“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,” said Dane Houlahan, KPMG’s new head of Oilfield Services M&A team in Aberdeen.
“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.”
Merritt will continue in his role of Chairman of XPD8 Solutions of which Cavanaugh is managing director.
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