Endless sells DavyMarkham to Indian conglomerate

Endless LLP, the leading turnaround investor in the UK mid-market, is delighted to announce the sale of its investment in the heavy engineering business DavyMarkham Limited to the Indian engineering and construction giant IVRCL.

The sale represents a huge success story for Endless, which acquired the Sheffield-based company in July 2007 following a sustained period of heavy losses under various owners. Endless backed Kevin Parkin and Duncan Hay, Managing Director and Financial Director respectively, to turn the business around and provided essential new investment capital and strategic support. Within a year of the original acquisition, the company had returned to profitability and won industry awards for Outstanding Manufacturing and International trade.

Endless has also made significant investment into the DavyMarkham site at Darnell in Sheffield, transforming the area into a vibrant business park with more than 10 new tenants operating from the site. Endless continues to own and operate the site and has further plans for investment.

Chris Clegg, Managing Director, who led the original investment, said “I am proud of the transformation that we have helped bring to both DavyMarkham and the site over the last two and half years. Kevin and Duncan have led a remarkable turnaround at the company, something that we are all very proud of. This sale to IVRCL will allow Davy Markham to continue to grow and invest further in such areas as their apprenticeship scheme, which is hugely positive for UK manufacturing.”

IVRCL is amongst the leaders of the Indian infrastructure industry, with a group turnover exceeding US$1 billion. IVRCL sees the acquisition as a means of securing a UK and European presence and a platform for expanding into new markets using DavyMarkham’s corporate credentials.

Mr Parkin, who will remain with the business, said “It is great news for DavyMarkham’s customers, employees and suppliers, since IVRCL is financially very strong, is highly growth orientated and dedicates itself to continuous improvement in all fields of its business”. He added “I am delighted with the support Endless has given to us and would recommend them as the perfect partner for a turnaround transaction.”

Mathew Deering, Portfolio Director for DavyMarkham commented “This transaction represents a 10.5 times return on our original investment and is significantly ahead of our investment plan. This was an extremely challenging turnaround given the extent of losses inherited and the recent recession, but we were always confident that DavyMarkham had a good underlying business and great prospects in its end markets, in particular the nuclear power sector.”

This exit represents the second sale that Endless has completed in February 2010, after its investment in Excelsyn was acquired by Albany Molecular Research Inc, a US company listed on NASDAQ, on 18 February, which also saw Endless net a four times return on its investment. The sale of Davy Markham to IVRCL is the third investment made by Endless that has been acquired by an overseas buyer in recent years, following the sales Peter Black International to the Chinese trading house Li & Fung and the sale of Excelsyn.

Endless and Management were advised on the sale by Martin Jenkins and Dan Renton of Deloitte and Ben Hendry and Gareth Saynor at Nabarros. IVRCL received legal advice from James Bullock at Irwin Mitchells.

Dan Renton of Deloitte commented: “The combination of DavyMarkham and IVRCL provides a fantastic opportunity for this Yorkshire manufacturing icon to grow and prosper. This deal is an excellent example of how a carefully controlled global M&A process can identify the right purchaser, even when they are as far away as India. In this economy more businesses are looking harder and further afield to get the right deal and the strategic best fit. ”