Bridgepoint sells NES
Graphite Capital is backing the £86 million management buy-out of the NES Group from its founders, Geoff Lloyd and Bryan Sullivan, along with Bridgepoint, the private equity group.
NES is a fast growing global technical recruitment business providing professionally qualified contract staff to blue chip clients across the world in the oil and gas, infrastructure, rail and power sectors. It also has an IT staffing and accredited training operation in the UK.
NES was founded in 1978. Bridgepoint backed a £32 million buyout in May 1999. The company has developed into a well diversified business in terms of customers, geography and sector. With headquarters in Manchester, NES operates from 14 offices - seven in the UK and the rest in the US, the Middle East and South-East Asia. The company has nearly 2,400 contractors, spread throughout 40 countries. They work on large, long-term projects overseas such as the Dubai Metro, the Kashagan offshore oil project in Kazakhstan and the Nanhai petrochemicals complex in China. In the UK assignments include the Network Rail's West Coast mainline. NES' clients include a number of major multinational companies including Shell, Alstom Power and Obayashi, as well as UK government departments and other public bodies.
NES chief executive Neil Tregarthen is leading the highly experienced buy-out team which includes Philip Lanigan, finance director, and Mark Tully, managing director of the UK operations. The non-executive chairman will be Stephen Ross, formerly of 3i and ex-founder of Springboard plc, a Graphite-backed business. The growth of NES has accelerated since Tregarthen joined the business two years ago. Since then, profits and net fee income (a key indicator for recruitment companies) have shown compound growth of an expected 33 per cent and 47 per cent per annum respectively in the year to October 2006. Turnover is anticipated to show a 16 per cent increase to £177 million. All of the markets in which the group operates are expected to expand. The increase in the price of oil has already stimulated long term projects in upstream oil and gas activity. The International Energy Agency forecasts investment of some $8 trillion to meet the energy needs of developing and middle income countries in the next 25 years. At the same time, UN-sponsored initiatives on clean drinking water and reconstruction and development projects will drive growth in the infrastructure market globally. In the UK, both Network Rail and London Underground have substantial five year investment programmes spurred, in part, by the 2012 Olympics.
Tregarthen says: “We foresee substantial organic growth in all our key markets. Nearly half our contractors are already working on assignments of nine months or more and we plan to increase that percentage along with the proportion of permanent placements. We are also looking to expand the number of overseas offices, leverage our relationships with existing clients and develop further our accredited training programmes.”