Freehold Hydraulic Engineering Company For Sale

Business description

Freehold Hydraulic Engineering Company – Design, Manufacture & Repair specifically for the Offshore Oil & Gas Industry

This is a wonderful opportunity to acquire a Hydraulic Engineering company that has worked closely with the offshore Oil & Gas Industry for over twenty four years. They offer a full turnkey solution for their customers and are the leaders and innovators in design, manufacture and repair of Hydraulic Cylinders and Hydraulic Systems. The customer database includes world renowned Blue Chip clients with over 95% of their business coming from these regular repeat customers.

The company is registered ISO 9001 2000 Quality Management System and previously held the equivalent BS5750 since 1992. There are three separate divisions within the company each of which is offered as part of the total sale.

The company is expert in redesigning all types of equipment for greatly improved reliability and performance, with allied reduced maintenance costs. The ability to deliver skills and accuracy for such demanding industries are a testament to the company’s reputation as an innovator and supplier of the highest calibre. They have also developed and designed three unique hydraulic systems three of which have international patents in place with the most recent a “rig skidding system” which has attracted attention from the world largest petrochemical companies, one of which currently has the device on trial.

The business runs from three factory units on an industrial estate in the North East of England. Two of these units are owned by the vendors of the business and the other unit which is adjoining was rented as the company expanded its operations in 2007. Within the factories there are specialist facilities including an explosion chamber with digital cameras, a hard chrome plating facility with a plating tank measuring 3 meters deep and 1 meter diameter, a full Auto CAD drafting facility plus in-house computer controlled design centre, a state of the art remote hydraulic testing area and in-house lifting capacity. The company have consistently and regularly invested in state of the art machinery and equipment, and pride themselves as being at the forefront of hydraulic engineering developments.

This is a company that is big enough to take on the larger contracts while maintaining a “hands on” approach, indicative of the highly motivated smaller company.

This is a truly exceptional opportunity that has come about through retirement of both partners and ill health to one of them. The future is bright for this company with many projects in work at present and many more in the pipeline. One of the projects at present is an offshore trial for a new device which is being carried out by one of the world’s largest oil companies with the prospect for further orders in the pipeline.

The company is profitable with a highly skilled and competent management structure in place. The business runs smoothly with good cash flow and has continual work in progress. There is significant income to come from the world wide patents that are already in place plus the daily repair and manufacture of customers own hydraulic systems.


Equipment:

All of the specialist testing equipment, machinery and vehicles are included in the sale of the business. A full inventory is available to all genuinely interested parties including;
Two pick up trucks and a transit van, 5 x lathes, 3 x vertical drilling machines, 1 x milling machine, 1 x Churchill grinder (12ft), 2 x welding bays, 1 x specialist testing facility, 2 x fork lift trucks, 3 x swing gibs, 2 x compressors, welding gear, computers, software plus other tools and equipment.

Customer Service:

Working closely with the offshore Oil and Gas Industry for many years has given the company particular insight into specific problems associated with Rig Gripper & Skidding Systems. In order to assist their customers with the problem of breakdowns to the Rig Gripper & Skidding System at the critical time, which can cost up to $200,000 per day, the company have designed a Universal Gripper Unit which they can hire out on a weekly basis whilst they repair their customers damaged unit. These units are designed as direct replacements for the majority of systems so they will simply fit into place without the need for modification. They keep replacements in stock and can rapidly assist when the customer needs it most. Customer service like this is invaluable to such an industry.

Key Strengths:

This is a highly technical and specialised company dealing with one of the most demanding and lucrative industries in the world. Every day that goes by without the offshore rig running costs the oil company circa $200,000. This is a business that has been developed to cater for the most demanding of customers and has an excellent understanding of their needs. They have the infrastructure in place including staff, facilities, knowledge, experience and accreditations to handle whatever is given to them to solve. Because of this the company is able to offer a full turnkey solution, a consistent high level of service and has built up an impressive reputation on the back of this. Many leading world wide clients have dealt with the company for years and it is testament to their abilities that circa 95% of their business comes from existing customers.

The company has a very strong pipeline of future revenues from their existing clients and with an aggressive marketing campaign they can utilise their patented devices to secure future orders.

Financial Information:

The business is being offered for sale on a going concern basis, all financial discussions will take place directly between the vendor and all interested parties under the auspices of Turner Butler.

Turnover is circa £1,155,000 with Gross profits of circa £533,000, Operating profit of £159,000 and Total net assets of £169,000

Property information

Property:

Freehold

Location:

There are three factory units, two of which are owned by the partners and the other is on a rental basis.

Business Operation

Expansion potential:

Whilst they work with offshore companies, there are no offshore maintenance contracts in place. The company are perfectly positioned to handle this work and it is only because they have been busy developing their own equipment and working flat out to design and build bespoke equipment for their clients, that they have not actively chased maintenance contracts. The other area which the company could also look at is the installation of the equipment which at present is sub-contracted out.

The company has had a patent granted and approved for a “vehicle positioning mechanism” for the automotive industry. This is a completely new diversification for the company who were asked, because of their expertise in hydraulics, to design and prototype a hydraulic mechanism that could be operated by one person saving time and money on the car production line, enabling correct positioning of the chassis and engine to be achieved with a minimum of time and effort. The company have developed a device for a major world wide car producer which has finished its trial. An order for 40 units has been completed with a possibility of future orders over a five year period.

Reasons for selling:

The owners have worked happily for the past twenty four years to build up the business. They are both reaching retirement age but one of the partners is in ill health. Both owners have both decided to sell the business. However, there is an option to retain one of the partners as a consultant as they are keen to see the business progress under new ownership.

Employees:

There are two directors that look after all of the daily running of the business. Each has their own individual responsibilities. There is a works manager, a foreman, a quality control inspector, a receptionist/ administrator and there are Eleven time served engineers.

Other information

Support & training:

The owners would be happy to help with a smooth transfer of the company in any way possible.