Business Growth Fund (BGF) is investing GBP5.4m of growth capital in Swanbridge Hire and Sales (SHS), a 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 has secured long term contracts with multinationals such as Dow Corning, Murco and Alstom. SHS delivered turnover of GBP14m in the year ending July 2012, which represents a 60 per cent 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, and 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 provided 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 pPartner 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.
Oldham says: “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.”
Paul Smith, founder and chief executive of SHS, says: “Over the last decade, SHS has built up a strong position in the scaffolding services market. However, in our business a certain level of upfront investment of equipment and working capital is needed when taking on new contracts and we had reached a point where we felt unable to take advantage of all opportunities available to us. This is a frustrating position for any ambitious business, and something we can now actively address with the support of BGF.
“With their support, we plan to strengthen our core capabilities, develop a broader range of services and expand into new sectors and geographies. This will allow us to best meet the needs of our clients.”
