Venerable engineer Motherwell Bridge has been bought by industrial services group Cape in a deal that has triggered a multi-million pound windfall for its management.
The takeover values the 116-year-old engineering stalwart at almost £38 million and will see senior managers, led by chief executive Russell Ward,, remain with the North Lanarkshire-based firm, which was previously majority owned by Islamic bank Kuwait Finance House.
Ward, below, who became chief operating officer four years ago, told The Scotsman that the buyout was an “excellent deal” for the firm and no job losses are planned among its 300-strong workforce. He added: “It’s good news for the staff, as it gives us a solid platform to continue our growth. Cape are looking to support us with our growth plans, particularly in the Middle East.”
Alex Brooks, an analyst at Canaccord Genuity, said: “We believe there is a good fit between Cape and Motherwell, in that it is a focused industrial engineering company with many customers in common. In particular, Motherwell has been seeking over the past few years to expand its business in the Middle East, a region where Cape is already strong and where there are likely to be some synergies.”
Motherwell Bridge employs about 100 people at its headquarters. Its management team, including chief operating officer Ian Ford and finance chief Colin Sharkey, are understood to have held a 16 per cent stake in the business.
Ward said: “We’re being retained for the long haul. Cape has acquired 100 per cent of the company, but this wasn’t about cashing in; it was about getting on with the growth of the business.”
The two firms already work together on maintaining storage tanks used in the energy sector, including at BP’s Sullom Voe oil terminal in Shetland, and Ward said: “We went into this looking for someone who would back the vision we had as management.”
The company had been looking at its strategic options since late last year, and Ward said the deal with Cape presented the best opportunity for Motherwell Bridge to continue its expansion. He said: “Other people were interested, but Cape matched our criteria. We didn’t go into this looking for a competitor to acquire us, and this provides us with a platform to maintain our growth on a global basis.”
The company began life as a specialist bridge engineer, but now manufactures and maintains gasholders for the global steel sector. It also maintains and refurbishes heat exchangers for the North Sea oil and gas industry.
Ward said Motherwell Bridge is active “on every continent except Antarctica” and does not believe the independence referendum in September will present it with many challenges.
He added: “We’re an international company, so whichever way it goes, we don’t see anything much to worry about at this stage.”
Cape is paying £34m in cash for the firm, which generated underlying pre-tax profits of £4.8m in 2012, on revenues of £34.6m. A further £1.25m will be paid if a “key contract” is secured, with an additional £1.5m due depending on future performance. Cape will also take on £900,000 of debt.
Cape chief executive Joe Oatley said: “Motherwell Bridge has tremendous expertise, reputation and brand recognition in the oil and gas storage tank market, including a market-leading position in the UK and we expect to accelerate Motherwell Bridge’s overseas growth through Cape’s international footprint.
“By combining the strengths of Cape and Motherwell Bridge we are uniquely able to provide a complete tank maintenance solution to clients in the oil and gas market.”