Equistone sells Hydrasun to Investcorp

Equistone Partners Europe Limited (“Equistone”), one of Europe’s leading mid-market private equity investors, today announces that it has exchanged contracts on the realisation of its investment in Hydrasun Limited (“Hydrasun” or the “Company”), to Investcorp.

Established in 1976, Hydrasun is a leading specialist provider of integrated fluid transfer, power and control solutions to the global offshore oil and gas industry. The business offers a diversified range of products, complemented by innovative manufacturing and technical support services to customers in over 50 countries worldwide.

Equistone backed the management buyout of Hydrasun in October 2007 in a transaction that valued the business at £75m. During the period of Equistone’s investment, the Company has grown rapidly, increasing revenues from approximately £50m in 2008 to over £105m for the financial year 2013. Coupled with numerous strategic initiatives implemented during its ownership, this growth has enabled Equistone to deliver a return in excess of 2.5x money on its c. £40m investment.

Since investing in 2007, Equistone has proactively supported Hydrasun’s management team, who have effectively transitioned the business from being a North Sea centric distributor of fluid transfer products, into an international provider of integrated products, services and solutions to a global base of offshore oil and gas customers. Key initiatives over the period have included:

Expansion of products and services

• On an integrated basis Hydrasun now provides its customers with an extensive range of hydraulic power and control products (including hoses and umbilicals, subsea connectors, valves, instrumentation and a full suite of integrity management services).

Investing in people and infrastructure

• Construction of a new £12m corporate headquarters in Aberdeen providing leading edge production, engineering and manufacturing facilities, the integrity management training centre, and warehousing.
• Increased number of employees from 400 in 2007 to 600 in 2013.

Strategic bolt-on acquisitions

• ATR Hydraulics (2009), an Aberdeen based hydraulics company.
• IFP Systems Ltd (2008), a hydraulic engineering company based in Rosyth, Scotland.
• Remaq Ltd (2011), a Brazilian flexible hose assemblies provider.

Geographic expansion into new international markets

• Extension of the business into Kazakhstan, additional middle eastern markets, West Africa and South America.

Rob Myers, Managing Director of Equistone Partners Europe, commented:

“The original decision to invest in Hydrasun was underpinned by an opportunity to back a well-proven and high calibre management team in a fragmented and fast growing offshore oil and gas market. The team led by Bob Drummond, demonstrated real strategic vision and first rate execution skills to transform Hydrasun, in particular given highly challenging market conditions during 2008 and 2009. Equistone sought to proactively support the business and the team throughout the period of our investment. This partnership created an environment in which the scale of the business was significantly increased, enabling revenues to grow by over 100% and the global footprint of the business to be materially enlarged. Hydrasun is well positioned to continue the growth achieved given the strength and depth of its customer relationships and the credibility of the fully integrated offering.  We wish the team every success in the next phase of the development of the business.”

Bob Drummond, CEO of Hydrasun, commented:

“We are very pleased with the performance and significant growth and development of Hydrasun, and with our overall achievements over the past 5 years. We have achieved strong growth, a number of key strategic objectives, and consistently outperformed the oil and gas services sector. None of this would have been possible without the very proactive involvement and support of Equistone and the very effective working relationships and close partnership that we developed with them.”

Completion of the transaction remains subject to competition clearances.

Rob Myers and Tim Swales led the realisation for Equistone.