NESSCO, which provides its services to the oil and gas industry, received £4 million from Aberdeen Asset Managers Growth Capital and the Scottish Venture Fund.
This was complemented by more than £10 million of debt supplied by Clydesdale Bank. Its funding was arranged by Ian McNeill, a director of its specialist and acquisition finance team.
The syndicate takes an equity stake in the company, with managing director Tom Smith and senior managers Austin Davidson and Bill Fraser remaining shareholders.
Aberdeen Asset Managers’ team was led by investment director Jock Gardiner, who said he backed the company due to the strength of its management. “Our equity funding will enable them to fast-track the business to its next stage of growth.”
Scottish Venture Fund investment manager Jonathan Lloyd-Hirst added: “NESSCO is a great example of a Scottish business, which has successfully developed its technical expertise through serving the oil and gas industry and now serves several other industry sectors.”
McNeill said NESSCO is a market leading business operating in one of the fastest growing sectors of the energy industry. “The management have delivered exceptional growth over the last few years and this transaction represents an excellent opportunity for us to deliver a debt funding package that will provide them with a platform to accelerate their growth.”
Smith and his team were advised by Johnston Carmichael and Paull & Williamsons, while Aberdeen Asset Managers was supported by Ritson Smith and law firm Biggart Baillie.
Biggart Baillie was led by David Allan, who was assisted by Fiona Piper and Kirsty Smith with involvement from the firm’s tax, pensions, banking and property teams. The firm was introduced to the deal by its long-term client, Aberdeen Asset Managers.
Johnston Carmichael was led by Andrew Walker, managing partner of the firm’s Aberdeen office, utilising the services of its in-house tax specialists.
Walker said Johnston Carmichael was asked to advise on the deal due to its existing relationship with the executive directors. “The acquisition has been well received by both the trade and staff and NESSCO plans to use the funding to accelerate its growth internationally. We look forward to continuing our relationship with NESSCO through this exciting time.”
The investors appointed Ritson Smith Corporate Finance as their lead adviser, with partner Graham Alexander heading its team.
Alexander said: “NESSCO is well positioned to take advantage of the additional resources available to allow it to capitalise on the opportunities that exist within the fast growing oil and gas telecommunications sector.”
Calash, led by managing director Alan Evett, provided operational and commercial due diligence reviews, which included examining the marketplace together with a business strategy analysis. “Nessco with its range of products, experienced personnel and facilities, is well placed to grow in the international Oil & Gas and other domestic markets, and the present high level of activity within the communications market should facilitate their growth.”
The financial review was provided by Anderson Anderson & Brown, following an approach by Aberdeen Asset Managers Growth Capital, Scottish Venture Fund and Clydesdale. Its team was led by partner John Black and head of tax Gill Pryde.
Black said: “Nessco currently has an excellent market position and a strong management team and the access to additional equity and debt will provide an excellent basis from which to accelerate the growth of the business.”
A review of the company’s pension and employee benefits was managed by Jim Tennent, managing director of Kudos, who said the firm has worked with Aberdeen Asset Managers and NESSCO for several years.
“We provided the investor with a report confirming that the company’s employee benefit package did not contain any risks or liabilities in relation to the pensions or ancillary benefits and that it was competitive.”
