Interview with a serial entrepreneur
March 04, 2014
Since its initiation in 1973, Express Engineering has grown from a precision engineering and tool-making company to a leading global contract manufacturing group.
It is one of the UK’s largest and best performing contract manufacturing solution suppliers to the oil and gas market.
Chairman Chris Thompson has been the driving force behind the Express Engineering Group and, under his leadership, the group has grown to £35million turnover.
Together with his Express Engineering Group responsibilities, Chris is currently a shareholder, investor, director or chairman of several other enterprises in the North East.
A serial entrepreneur, Chris' assertiveness and passion for life have been instrumental in shaping his career. He has earned recognition in the public sector where he is an enthusiastic and passionate ambassador for regional regeneration.
I caught up with Chris to find out about the recent investment into Express Engineering and his plans for the future of the company.
Tell us about Express Engineering
Express Engineering is celebrating 40 years being in business in the North East this year. We have experienced significant growth since 2009, which while it was at the start of the economic downturn, our shift in focus to the oil and gas sector and our decision to continue to invest in the recession have stood us in good stead. While many of our competitors stopped investing when the recession hit, we took the decision to invest in a significant capital expenditure programme as well as protecting all our employees’ jobs. This would allow us to exploit opportunities when the economy bounced back by giving us a competitive advantage with more capacity.
What were your objectives at the start of the deal and how did these evolve throughout the process? What drove your decision to seek external equity funding at this point in Express Engineering’s development?
Historically we had always looked to internal resources when funding growth but certain opportunities presented themselves which couldn’t be funded by the company. We were keen to explore options that would significantly grow the company and drive it forward, such as buying out our joint venture (JV) partner at Petrotech in Brazil, further UK acquisitions and plant expansions. We quickly realised we needed to look for equity capital to pursue the opportunities.
How will the acquisition of the trade and assets of Burdon transform the group? What are your plans for the Stokesley site?
The acquisition of Burdon has provided us with first class facilities, a modern plant and equipment. We plan to significantly expand the site, developing the two acres of free land with work starting early in 2014. This expansion and extra capacity will not only allow us to meet the increasing demand of our oil and gas customers, but it will enable us source to markets outside of the oil and gas sector.
Having a base in Stokesley will enable us to recruit from a new candidate pool in the Teesside area and grow our first class workforce at the plant.
What were you looking for when selecting an investment partner?
It was important to us to have a partner with experience of assisting growth of mid-market companies. We wanted someone that had the resources and a track record of success. We had to therefore make it a highly competitive process which PwC ran to make sure that it was very prescriptive of what Express Engineering required. LDC came in with the best offer, understanding the value and growth opportunities for the company. PwC and Ward Hadaway concluded the process very smoothly, securing the private equity investment.
What's next for Express Engineering? How will this investment be used?
We will continue with our plan now we have the financial resource. Key parts of the plan have already been successfully executed with the acquisition of Burdon and the buyout of our JV partner in Brazil, so we now own 100% of Petrotech. Looking to the next couple of years, we will continue to expand our facilities, investing in both plant equipment and people in both the UK and Brazil.
What were the most challenging aspects of the transaction?
There were a lot of moving parts involved in the deal. A significant element of the business is in Brazil and a strategic part of the deal was the JV buyout of Petrotech. The coordination of acquiring Burden was also critical as was maintaining the financial performance of the companies.
How did PwC contribute to the success of this transaction?
PwC coordinated the whole process. There was a lot of interest from private equity houses and so you were instrumental in ensuring we got the best value for our shareholders. The strength of the PwC corporate finance team added significant value during a complex process that needed sophisticated management and clear communication
How are you seeing the North East market for the coming year?
We have been confident of the future for a while now. We were fortunate to see growth throughout the downturn due to our decision to invest in equipment and people. There is definitely growing confidence in the wider market.
Thank you Chris