Carr’s Group bolsters its position in engineering with key acquisition
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Carr’s (CARR.L), the Agriculture and Engineering Group, announces the acquisition of the entire issued share capital of NW Pump & Valve Limited, the holding company of NW Total Engineered Solutions Limited (“NW Total”), a service and manufacturing company providing value-added solutions to the nuclear defence, nuclear decommissioning, nuclear power generation and other highly regulated markets, for a total cash consideration of up to £9.6 million.
NW Total is based in Barrow-in-Furness, Cumbria and was founded in 1994. The business designs and manufactures bespoke process equipment packages and provides on-site technical support, installation and condition monitoring services, across the nuclear defence, nuclear power generation and decommissioning, utilities, pharmaceuticals, and energy sectors. In recent years the business has evolved significantly under the leadership of its management team, who acquired NW Total through a management buyout in 2010.
NW Total is a trusted supplier to some of the world’s largest companies in the nuclear sector. The business has built a reputation for excellence and developed long-term working partnerships over 25 years with both end customers and key tier 1 operators. NW Total has a highly skilled employee base, many of whom operate from customer sites providing direct specialist services.
The acquisition of NW Total adds a specialist engineering solutions provider to the Group’s Engineering division under the leadership of the divisional Managing Director, and will bring a range of benefits and synergies including:
- Enhancing the Group’s capabilities, in particular across nuclear markets;
- Adding specialist services, including condition monitoring;
- On-site technical competencies and highly skilled personnel;
- Enabling opportunities to partner with existing Carr’s Engineering businesses, such as in the manufacture and supply of complex pressure vessels, heat exchangers and fluidics technologies together with the provision of design and project management services; and
- Bringing further long-standing trusted relationships with key tier 1 operators and their end customers.
NW Total will also benefit significantly from being part of a larger group with access to increased manufacturing capacity alongside greater financial and technical resources. The Group’s wider Engineering division serves a global customer base from its facilities across the UK, Germany and the USA. The services and capabilities of NW Total will sit alongside the Group’s existing offering of highly respected specialist technologies, products and services such as the design and manufacture of bespoke equipment, the supply of remote handling equipment (such as the TELBOT®), patented nuclear technologies (such as MSIP®), radiation protection, dynamic natural convection and decontamination. The former owners of NW Total will remain with the business post acquisition to drive future growth.
The acquisition of NW Total comes at a time of significant opportunity in nuclear defence. Such opportunities are expected to continue into the longer term through projects such as the £31 billion UK Dreadnought submarine programme. Additionally, the current and planned decommissioning of the UK’s nuclear power capabilities continues to provide excellent opportunities for specialist providers.
NW Total has been acquired for an initial cash consideration of £6.0 million, with further contingent cash consideration of up to a maximum of £3.6 million payable over the next three years, based on the achievement of agreed financial targets. The Group will use an additional term loan facility of £6.0 million to fund the initial consideration, with the contingent consideration being self-financed.
For the year ended 31 March 2019, NW Total recorded turnover of £9.1 million, EBITDA of £1.6 million and Profit Before Tax of £1.5 million. The gross assets of NW Total as at 31 March 2019 totalled £6.6 million. There will be additional operating expenditure required relating to integration and business development, but the acquisition is expected to be earnings enhancing in the first full year of ownership. Notwithstanding the acquisition, the Group continues to trade in line with the Board’s expectations for the current financial year.
Graham Hartley, Managing Director, Engineering Division, commented:
“NW Total is a business we’ve admired for a long time given its reputation for providing industry leading engineering services to key tier 1 operators within the nuclear sector and adjacent markets. NW Total’s capabilities across a number of complex industries will be a great addition as our Engineering division seeks to capitalise on the burgeoning opportunities in the nuclear sector.
“We envisage multiple synergies with several of our other Engineering businesses with whom we can align on larger projects using the Group’s broad capabilities. Ian and Mark are first-class operators who we have no doubt will fit seamlessly into the rest of the Carr’s Engineering division.
“I’d like to extend a warm welcome to the whole NW Total team and look forward to the business fulfilling its potential under Carr’s Group ownership.”
Ian Brown, Managing Director of NW Total, commented:
“We are delighted to have become part of Carr’s Group. Carr’s has been very successful operating in similar markets to ours and the opportunity to cross sell and to work off a bigger platform could not be more compelling. This is a great opportunity for us to take the business to the next level and, with Carr’s history of investing behind their acquisitions, we believe the future is very exciting. We are very much looking forward to working with the Carr’s management team over the months and years ahead to help drive the growth in the global Engineering division.”