ENCORE CAPITAL ANNOUNCES INVESTMENT INTO OIL AND GAS PRODUCTS BUSINESS SUPPORTED BY OCTOPUS INVESTMENTS
Encore Capital LLP (“Encore”), the London based investment firm focused on backing entrepreneurial growth businesses, has completed an investment into Technical Software Consultants Limited (“TSC”), a designer and manufacturer of non-destructive testing equipment. The transaction was supported by Octopus Investments (“Octopus”), the investment specialist, which provided a £3m facility to enable the acquisition.
Encore has acquired a majority shareholding, providing a partial exit for TSC’s two owners, David Topp and Martin Lugg, who will continue as directors and shareholders in the business.
TSC uses its proprietary electromagnetic ACFM® technique to detect and size cracks in metals. Established in 1984, TSC is highly profitable, selling its equipment globally via an international network spanning over 40 countries. During 2011, sales to international markets represented almost 90% of turnover, primarily into the integrity management segment within the oil & gas sector. The business has enjoyed strong growth over the past five years as adoption of the technology has increased.
TSC's patented technology works through coatings of paint and other coverings, thereby minimising the potential down time for mission-critical equipment. The technology can be used in a range of hostile environments, including at ultra-deep subsea levels and in extremely high temperatures. Through the software that TSC has developed, an audit-trail is produced which makes the inspection process significantly more robust than traditional methods.
TSC has also developed equipment that measures loads and maps stresses on metallic structures (StressProbe), such as oil platforms and mooring chains. Demand for these enabling technologies has also increased as asset lives have been extended and where the risk and consequence of failure can be high.
TSC’s technologies provide unique solutions and have been accepted by several leading firms in the oil & gas sector. Its products are also applied in several other sectors including engineering, rail, nuclear, mining and drilling. It is the market leader within its sector and has an exciting range of growth opportunities ahead.
Commenting on the investment, Shirin Gandhi, Partner at Encore, said: “We have been actively looking for investments within the integrity management space. TSC has developed market leading technologies and has demonstrated rapid international growth through a blue chip customer base. We believe there is exciting potential for further growth with the additional resource and expertise that management recognised they need and which Encore has a track record in helping to source.”
Hugh Costello, Investment Manager at Octopus, added: “We are pleased to be able to support Encore in their investment into TSC. It is an impressive business, which has a track record of consistently delivering for its customers. Octopus is well positioned to provide flexible finance to high calibre small to mid-sized companies like TSC that would benefit from funding, whatever sector they operate in.”
As part of Encore’s investment, Maurice McBride has been introduced to the business and will take on the role of Executive Chairman. Commenting on his appointment, Maurice McBride said: "It was quite clear from my first meeting with TSC and the management team that the future prospects for the business are quite significant and I am looking forward to working with both them and Encore to help exploit these opportunities".
David Topp added: "We are pleased to have Encore as a partner in the business. Their approach has been very commercial from day one and their experience and contacts will help us accelerate the growth of the business".
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For further information, please contact: Shirin Gandhi, Encore Capital Georgina Turner, Octopus Investments e: shirin@encorecapital.co.uk e: gturner@octopusinvestments.com t: +44(0)20 7183 7592 t: +44 (0)20 7776 7968
Notes to Editors The advisers on the transaction were: Commercial due diligence: Calash, Aberdeen Financial due diligence: Menzies Corporate Finance, London Legals: Matthew Arnold & Baldwin, London (Encore); Wragge & Co, London (Octopus) About Encore Capital LLP
Encore Capital is a London based investment firm focused on backing entrepreneurial growth businesses. Encore has over £60m of committed funding and actively seeks to invest between £1m and £10m in buy outs and development capital opportunities. Encore is opportunity driven with a structure and approach that allows it to make informed decisions quickly and to invest in situations which others may find challenging.
Encore is owned and managed by its Partners who have a proven track record in building and realising value for shareholders and management teams.
Encore takes an active role in building and supporting strong management teams. It works closely with portfolio companies to develop strategic plans, enhance organic growth, pursue value creating acquisitions, and increase operational efficiencies. www.encorecapital.co.uk About Octopus Investments
Octopus Investments, founded in 2000, is a leading investment specialist. We offer innovative core and satellite investment solutions to UK investors, and a wide range of funding options for exceptional companies.
Our core investments include a discretionary management service, multi-manager multi-asset OEICs, and single manager OEICs. These are complemented by our range of satellite solutions, including venture capital trusts, enterprise investment schemes and inheritance tax products. Each product has been designed to solve specific problems faced by financial advisers and their clients. Our funding solutions cover the entire capital structure, from equity through mezzanine to senior debt, and we seek out outstanding management teams in unlisted companies with whom we can partner.
Octopus has built its business around three core pillars: customer led innovation, excellence in customer service and the quality of our people. We employ more than 200 people and currently have more than £2.5 billion in assets under management.
Octopus has won a number of awards for its products and customer service. We have twice been voted one of the best 100 SMEs to work for by the Sunday Times, and we are one of only two fund management companies to be AAA rated by financial advisers for customer service. For more information, please visit our website www.octopusinvestments.com
About TSC Since its establishment in 1984 TSC has gained an international reputation as an expert innovator of advanced Non-Destructive Testing (“NDT”) solutions. TSC is the world authority on the ACFM®, StressProbe, ACPD and ACSM NDT inspection techniques. www.tscinspectionsystems.com