Southwest
Cut from a different cloth
The most prominent sector for the fastest-growing PE-companies in the Southwest is consumer products and services, with notable retailers HobbyCraft and Farrow & Ball making the cut. While the region houses a smattering of high-growth healthcare-focused companies, the second most successful sector here for PE is business products and services.
Hailing from that sector and topping this region’s high-growth list is Advanced Innergy Solutions (AIS), a maker of specialist materials, insulation and fire protection systems. The Gloucester-headquartered company received minority backing from Growth Capital Partners (GCP) in March 2014.
Following a management buyout back in 2008, several of the company’s high-net-worth investors were looking to cash in on their investment, kicking off a process to bring in private equity investment. Specifically seeking a minority investor, GCP emerged as the successful partner. “We liked their approach and they referenced really well as a minority specialist, and we got on with them personally,” recalls AIS managing director Andrew Bennion.
We have plans to enhance our offerings in areas including greentech and offshore to improve the quality and commerciality of those products
In the years immediately following the investment, AIS was impacted by the crash in oil prices. However, according to Bennion, GCP supported the company’s decision to diversify into less sensitive markets, moving from a strong focus on upstream deepwater offshore oil and gas to industrials and downstream.
Furthermore, while other companies in the space were stripping out overheads and reducing employee numbers, thanks to the support of GCP, AIS invested in its sales team and increased its market share. “That meant we were in a better position coming out of the cycle,” says Bennion.
As well as a push to diversify into new markets, more recently GCP supported AIS’s acquisition of CRP Subsea in November 2022. The add-on provided a major boost to AIS’s range of subsea and offshore wind services offerings and revenues. Says Bennion: “We had been speaking with the owners of CRP for some time. We felt there were lots of strong synergies between us, which has proved to be true.”
There is still work to be done on maximising synergy savings following the CRP acquisition, says Bennion.
“And we have plans to enhance our offerings in areas including greentech and offshore to improve both the quality and commerciality of those products,” he adds.
During the investment period, AIS has also invested heavily in fire protection and testing for lithium batteries. “We predict this will be a huge market so we want to ensure we have the right technology offering,” explains Bennion.
Adding to the company’s continued plan to diversify, AIS is also working on new products for the nuclear energy market. “We also see that as a big growth opportunity, especially following the announcement on small reactors,” he adds.
After you’ve made an investment, having a strong local network can support the growth of the business
While AIS has clearly gone from strength to strength with GCP’s support, there are of course challenges too. While Bennion says AIS’s Southwest home is helpful when it comes to international trading, with easy access to Heathrow airport, recruitment in the area can be tough.
"Recruitment is always a challenge for us. There's a lot of competition for the shopfloor people among the aerospace companies based here," he explains.
This particular concern is well observed by LDC managing partner Jonathan Bell: “After you’ve made an investment, having a strong local network can support the growth of the business. Within local communities, the key challenge is always finding the right people. When you’re plugged in, it's hopefully easier to identify people you’ve worked with before and bring them into new situations.”
“A lot of private equity houses are holding onto their investments for longer. With that, we’re seeing private equity houses rolling up their sleeves and where needed working closely with management teams, who value the operational insights they can bring.”
Catherine Jones, Partner, Tax, PE Leadership Team, BDO
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