NEWS & MEDIA

Shard Credit Partners backs management buy-out of GadCap Technical Solutions Ltd

8 February 2019

SHARD CREDIT PARTNERS BACKS THE MANAGEMENT BUY-OUT OF GADCAP TECHNICAL SOLUTIONS LTD IN THE NORTH EAST BY ITS SENIOR MANAGEMENT TEAM

Shard Credit Partners announces the acquisition by way of a primary management buy-out (“MBO”) of the business and assets of the power generation and aerospace solutions (“PGAS”) division of a multinational engineering conglomerate in the North East of England.  The new business will be called GadCap Technical Solutions Limited (“GadCap”) and is based in Washington, Tyne and Wear.  The MBO completed and funded on February 8th, 2019.

The MBO is being led by Michael Baker and Paul Seccombe, a pair of experienced engineers who have worked together in the business being acquired for a combined total of more than thirty years, since 2002.  The team will implement a programme of organic growth to further develop the GadCap business internationally, with a particular focus on growing their share of the aerospace and energy and power engineering markets in the Middle East, China and Asia.

GadCap designs and manufactures market-leading bespoke engineered products for the power generation and aerospace industries.  The PGAS division is the only business in the world producing a consumable steel-based, mineral product utilised in Advanced Gas Cooled Nuclear power stations with a long-term contract to supply the UK nuclear fuel industry.

GadCap is also a market leader in the design and production of bespoke tip clearance sensors through its CapaciSense product line, which are used in the measurement of operational gas-powered turbines during product development to increase energy efficiency and safety.

Funding for the deal has been provided exclusively by London-based Shard Credit Partners.  Alastair Brown, CEO of Shard Credit Partners commented, ‘We are delighted to have been selected as financing partner to back this high quality MBO.  This will be our first investment in the North East region and we look forward to working with the MBO team to help them execute their organic growth strategy for the business over the coming years.’

Andrew Madden and Kerry Gibbons at Gateley plc acted as legal advisers to Shard Credit Partners.  Andrew Cowan at Gateley led the legal due diligence review.

Michael Baker said: “Paul and I are very proud to establish GadCap Technical Solutions Ltd, building on the solid foundations of the previous organisation.  We have created a strong niche in key markets through the creation of innovative engineered-solutions, which we have ambitions to expand in our existing markets and new geographies.”

Paul Seccombe said: “Working with Shard Credit Partners we are confident in our ability to grow the business and maximise on our position at the heart of the North East and its engineering pedigree.  We have a very talented team of engineers and manufacturing personnel, producing advanced and bespoke products, which we aim to expand as we develop the business further.”

The corporate finance adviser to the MBO team was Ryecroft Glenton (“RG”) in Newcastle.  David Nixon, Corporate Finance Manager at RG commented, ‘having led the PGAS division for a number of years, Paul and Michael were ideally-placed to take on the operation from its owners through an MBO.  They have been instrumental in the success of the operation to date and had the autonomy to develop and grow the business, which they have done very successfully’.

Shard Credit Partners has now completed three investments from its inaugural fund, with its second and third investments both completing on the same day (February 8th, 2019).  In addition to the MBO of GadCap in Newcastle, Shard Credit Partners also completed and funded the MBO of BW Legal Services Ltd in Leeds on February 8th, 2019.

Alastair Brown, CEO of Shard Credit Partners commented, ‘completing two MBOs in one day is a first for us, we very much look forward to completing our next investment in the next several weeks’.  Following these investments, Shard Credit Partners Fund I will be around one-third deployed.

Typically, Shard Credit Partners aims to invest as the sole finance provider through senior secured unitranche loan structures, in amounts of between £5-15 million per borrower, with maturities of three to seven years.

 

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