Endless LLP supports AMCO MBO

A portfolio of companies with turnover of £100m has been acquired in a management buyout from Amco Corporation Plc. David Jackson and Ian Swire, supported by Endless LLP, have led the buyout which sees four non-core trading companies with 800 employees being acquired by the new parent company Amco Group Limited.

Amalgamated Construction, Amco Drilling, Amco Plastics and Amco Developments are the principal trading businesses included in the £9.4m buyout, which will continue to operate from headquarters in Wakefield and three key operational sites in Barnsley, Warrington and Wath upon Dearne.

Amalgamated Construction accounts for around £80m of the turnover of the new group and originally focused on providing underground contracting services to the coal mining industry. As that sector declined, its reputation for delivering complex engineering solutions in a highly regulated health and safety environment generated new opportunities in the civil, rail, and engineering sectors.

As a result of this Amalgamated Construction developed specialist skills in a wide array of areas including rail maintenance, tunnel refurbishment and mechanical engineering and has undertaken key projects for Network Rail, National Grid, Mersey Tunnels, Magnox, United Utilities, LaFarge and Scottish & Southern Energy. Significant recent projects include the £13m improvements to the Mersey Queensway Tunnel to provide emergency escapes, the £2.5m refurbishment of Monkwearmouth Bridge, Sunderland and the £2.5m refurbishment of a swing bridge and bascule bridge in Exeter.

At the time of the buyout, it is currently completing the £6m Dock Street tunnel contract for Dundee City Council and, on behalf of Network Rail, is undertaking a programme of signal renewals in the Newport area and has just commenced a programme of major improvements to the Severn Rail Tunnel. The business is also operating three framework contracts for minor civil works for Network Rail across a number of their territories, which together employ over 80 staff and 300 operatives.

Amco Drilling provides specialist exploratory drilling services to mining companies in Guinea and Mauritania in West Africa, including South Africa’s leading gold producer, AngloGold Ashanti. Amco Plastics manufactures plastic extrusions, flexible ducting and children’s play products. Amco Developments is a property development company specialising in residential, commercial and industrial developments in the North of England.

David Jackson, the new Group Managing Director, stated: “For a group that is rich in history, this is yet another exciting time for the businesses involved in the MBO. We have a very healthy forward order book and see the markets serviced by the group remaining buoyant for the foreseeable future, particularly in the rail and engineering sectors.”

Ian Swire, Group Finance Director, added: “It is fitting that a locally-based private equity house is helping to fund the next stage of growth for Amco after nearly 40 years of spearheading engineering excellence in Yorkshire. This is a very exciting opportunity for us all, happening at a time when the market for engineering and rail services is strong.”

Darren Forshaw, Partner at Endless, who joins the Board of Amco Group Limited, commented: “We are dedicating this investment to the memory of our dear friend and colleague, Phil Tate, who had worked tirelessly to deliver this complex transaction. Phil was proud that this exciting deal was going to be one of the first into the new Endless fund and we all wish he had been here to celebrate it.”  Phil Tate was tragically killed in a snowboarding accident on 2 March 2008 in the French Alps.

Aidan Robson at Endless added: “We are delighted to be backing such an experienced and successful management team. The opportunities to grow this diverse group are widespread and the investment we are providing will help deliver this.”

Darren Bryant, Corporate Finance Partner at PricewaterhouseCoopers LLP, who advised Endless, commented: “This was a very complicated deal delivered in a difficult funding environment, which is testament to the flexibility Endless shows in its investment strategy. We are delighted to have worked with Endless, David and Ian on this deal.”

Amco Corporation Plc, which will change its name in the next three months following the deal, will now focus on structural steel activities through its principal trading subsidiary Billington Structures Limited.

Endless was advised by Walker Morris (Richard Naish & Peter Considine) and PricewaterhouseCoopers LLP (Darren Bryant & Chris Pennington) with Vincere LLP (John Dewhirst & Tony Lumb) providing financial support. Halliwells (Neil Thompson) advised the MBO team. The Royal Bank of Scotland plc provided working capital facilities (Andrew Barraclough & Jeremy Bell).