Case Study: Corporate Finance Team supports acquisition of R & A Kay Inspection Services by BES Group
Background
R & A Kay Inspections Services (Rak) is a leading inspection services company catering for onshore oil and gas, petrochemical, industrial gases, chemicals and utilities sector. With its headquarters in Teesside, the business, which was formed in 1984 and then acquired by Executive Chairman Duncan Jarrett in 2007, supports blue chip clients in the UK and Europe with their inspection requirements. The team has built a solid reputation with some of the most skilled and experienced engineers in the country.
BES Group is a lead testing, inspection certification and compliance organisation, providing customers with end-to-end risk management solutions. BES has been backed by mid-market private equity firm, Inflexion, since 2015, which has supported BES on multiple acquisitions during that time.
How we helped
The shareholders of Rak contacted Armstrong Watson in December 2023 after being approached by BES about its interest in acquiring the business. The shareholders engaged AW seeking assistance with:
- Presenting the business in the best possible manner to BES
- Reviewing and supplying BES with the information requested
- Obtaining and evaluating the BES offer
After receiving the initial offer, our Corporate Finance team, led by Partner David Wilson, negotiated with BES to reach a deal that was suitable for all parties, helping highlight some of Rak’s unique selling points. Subsequently, once a deal was agreed our team also provided the shareholders with:
- Assistance with the due diligence process
- Liaising with legal and taxation advisers
- Reviewing and advising on legal documents
- Advising on the completion mechanism
- Project managing to completion
The team worked closely with the shareholders with almost daily communication to ensure all parties understood where the transaction was and what the key snagging points were. This also helped when it came to reviewing and negotiating on the Sale and Purchase Agreement (SPA), as it was important that we understood the key goals and ambitions of the shareholders to ensure the deal met their needs.
Results
Following a quick and efficient transaction managed by Armstrong Watson, Rak is now part of BES, with the acquisition being a key strategic move as BES looks to grow further. Both Phil Jackson, Managing Director, and Ian Chapman, Senior Finance Manager, of RaK, will remain in the business to oversee its future growth.
David Wilson said: “We pride ourselves in delivering a first class service to our clients and this was demonstrated by the collaborative way we worked with the Management Team at Rak which enabled them to achieve their goal in an efficient, timely manner. The acquisition by BES provides an exciting opportunity for RAK to capitalise on their strong market position and blue chip client base to expedite their growth as part of a wider national group.”
Michael Stewart, Corporate Finance Assistant Manager, added: “It has been fantastic working with the team at Rak. There has been a lot of dedication and hard work from all parties to get a great deal over the line. The sale of the business is a true testament to the tireless dedication from Duncan Jarrett and the team since acquiring it back in 2008. Good luck to the team in all their future endeavours.”
Why Armstrong Watson?
The Shareholders sought out David Wilson, Corporate Finance Partner for the North East and Cumbria, following a positive recommendation from Martin McKinnell of The Endeavor Partnership, RAK’s legal advisers, after working together on several deals in the past.
The shareholders engaged with Armstrong Watson following a short pitch delivered by David and Michael which demonstrated the level of knowledge and experience within the Corporate Finance team and also the level of research into the market, active acquirers and valuation multiples which goes into all pitch documents.
