Energy Cranes International has acquired Aberdeen-based Baricon Systems Limited in a deal which takes Energy Cranes - the world's largest offshore crane and mechanical handling services contractor - into the fast-growing subsea cable and pipe-laying markets. The deal values Baricon at £8.7 million.
Baricon was established in Aberdeen in 1988 and has developed a range of Carousels (pictured) and Tensioner Systems for the storage and deployment of sub-sea pipelines, flowlines, control lines and cables. Baricon's carousel systems range up to the massive 8,000 tonne capacity, 32 metre diameter, BS 122 model and are capable of handling flexible pipelines up to 600mm diameter. The company's products and systems are supplied either on sale or rental, with technicians available to operate and maintain the equipment offshore for maximum assured integrity.
Led by managing director Bill Morrison, Baricon operates from factory premises at York Street in Aberdeen's harbour area. Mr Morrison will continue to manage the business as a wholly owned subsidiary of Energy Cranes.
Baricon showed sales of £4.5 million in its last full-year accounts to March 2007 and is projecting sales of £6.1 million for the year just ended 31st March 2008.
John Jordan, chief executive officer of Energy Cranes, says "Baricon is an innovative and successful business operating in the subsea pipe and cable handling market - a segment we believe will grow rapidly as industry demand for longer and larger-diameter spooled pipeline installations increases. The fit with Energy Cranes established skill-sets in mechanical handling and hydraulics systems is immediately apparent."
The acquisition represents evolution of an existing relationship between Energy Cranes and Baricon Systems: Aberdeen Hydraulics, an Energy Cranes subsidiary, was already providing hydraulics engineering, manufacturing, and field services to Baricon.
Bill Morrison, director of Baricon Systems says: "Baricon has earned an excellent reputation for product development and delivery: now that we have the financial strength of Energy Cranes behind us, we will be able to grow our export sales to overseas energy regions much more rapidly than would have been possible from our own resources. This makes the deal very good news for our existing workforce, and also holds out the prospect of increased employment in Aberdeen."
Energy Cranes plans to create several new engineering and technician posts immediately at Baricon, with others to follow.
Energy Cranes International Limited was the subject of a management-led buyout with support from Close Brother Private Equity (CBPE) earlier this week (31 March 2008). Both transactions were supported by a banking syndicate led by RBS and also including Barclays, HSBC, and Lloyds.
"The management buyout of Energy Cranes in partnership with CBPE provided us with a line of acquisition finance to fuel a number of planned additions to the Energy Cranes group," says Energy Cranes chief financial officer Adrian Bannister. "We are delighted to have completed the Baricon acquisition so soon after the main deal, and now look forward to moving ahead with other acquisition plans while continuing the development of the existing businesses."
Alec Carstairs, Ernst and Young partner advising management in this week's deals, commented "The Baricon deal has happened at a key point in the development of Energy Cranes, and represents a great fit with their business. We are delighted to have helped deliver this deal so promptly and successfully"
Energy Cranes, which has its world headquarters in Aberdeen, already includes subsidiary businesses Sparrows Offshore and Aberdeen Hydraulics and has 2000 employees employed at 19 locations spanning 6 continents.