By Daniel Hunter
Business Growth Fund (BGF), established to help the UK’s fast growing smaller and medium sized businesses, has announced its £5.4m investment of growth capital in Swanbridge Hire and Sales (SHS), a specialist provider of high specification industrial scaffolding services, based in Barry, South Wales.
This is the fourth investment to be led by BGF’s regional team for the South West of England and South Wales; and SHS is the first business to be backed by BGF in Wales. The investment was managed for BGF by Paul Oldham, Ned Dorbin and Alex Garfitt. SHS was introduced to BGF by Grant Thornton Corporate Finance in Cardiff.
Founded in 1998 by Paul Smith, SHS erects and dismantles large scale, technically demanding scaffolding structures for clients in the petrochemical, oil and power generation sectors. It also provides complementary insulation services. SHS’ services are often required by site owners, operators and contractors for essential maintenance and refurbishment work of industrial plants. Offering the highest safety and operational standards, SHS has secured long term contracts with multinationals such as Dow Corning, Murco and Alstom. SHS delivered turnover of £14m in the year ending July 2012, which represents a 60% annual increase.
The company’s head office is in Barry, South Wales, and it employs 226 people.
The investment of growth capital from BGF will support SHS’s expansion into new sectors such as nuclear, pharmaceutical and demolition; enable the development of extended service lines such as insulation, which can be delivered alongside its core scaffolding offering. The intention is to double the size of the business in the next three years, which in turn has the potential to create over 100 new jobs across the various sites the company operates at.
BGF used its ability to structure investments flexibly, providing a mixture of preference shares or subordinated loan stock in line with investee preference. Richard Kilner, previously Managing Director of Cliffe Group (a construction and manufacturing group) and a Partner in the 3i infrastructure and growth capital teams, will join the SHS board as non-executive Chairman. Paul Oldham will also join the board as BGF’s representative.
Ongoing construction and decommissioning of large-scale UK power plants will continue to drive scaffolding demand. The UK scaffolding services market is currently valued at £4.2bn and is forecast to grow to £4.8bn by 2017.
Paul Oldham, BGF’s regional director for South Wales and the South West of England, commented:
“We are delighted to be backing SHS and supporting Paul Smith and the management team in realising their ambitions for the business.
“SHS has consistently won market share on the back of its reputation for delivering a high quality service and its responsiveness to customer needs. Boosted by an injection of growth capital, it is in great shape to take advantage of growing demand for scaffolding services, challenge larger competitors and increase the number and size of contracts it takes on.
“Across the UK, BGF has been seeing increasing demand from businesses looking for long-term funding and has so far supplied over £80m to ambitious businesses. SHS is the first of what we hope will be many successful investments in Wales. We are working hard to inspire more entrepreneurs in this region and look forward to making a real difference to the local community of small and mid-sized companies that need guidance and support, as much as funding, to achieve growth.”
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