NEL Supports BIMBO of North East Contractor Debmat Surfacing
Debmat Surfacing Limited (Debmat) - a long-established and highly respected North East surfacing contractor and civil engineering business - has been acquired through a Buy In Management Buy Out (BIMBO) supported by a seven-figure investment from NPIF II – NEL Debt Finance, managed by NEL Fund Managers as part of the Northern Powerhouse Investment Fund II (NPIF II).
Founded in 1979, Debmat provides domestic and commercial surfacing and civil engineering solutions to a wide range of sectors including construction, commercial, retail, and education, and prides itself on being able to deliver timely and cost-effective solutions to a diverse customer base.
The investment will also support Debmat’s next stage of growth as the new leadership team plans to introduce complementary services, including remediation activities, in response to client demand for a more holistic, end-to-end offering. These additions are also expected to create new local jobs alongside the company’s existing core team of employees.
The incoming ownership team includes Debmat’s existing Co-Managing Director, John Turner; Nick Shilling, former Managing Director of demolition contractor Thompson’s of Prudhoe; and Ian Wilkin, a chartered accountant and former CFO and COO of a New York-based real estate private equity firm.
John Turner, who has more than 32 years of sector experience and a strong track record of growing the business, will move from Managing Director to Chairman. The management team has also been strengthened by two recent appointments - Martin Barker as Managing Director and Ben Harris as Commercial Director. Barker and Harris bring a wealth of experience working in similar roles and a renewed energy and focus to support Debmat’s wider growth plans.
Nick Shilling worked at Thompson’s of Prudhoe from the age of 16. He went on to become Managing Director and led the company during a period of significant growth, with the company also recognised as Contractor of the Year at the World Demolition Awards under his leadership. He brings to Debmat over 30 years of experience in the sector and extensive relationships to support the existing business and the growth strategy.
Before selecting Debmat, Shilling and Wilkin reviewed more than 25 acquisition opportunities. Debmat stood out because of its strong service offering, highly regarded and experienced team, and growth potential.
Shilling and Turner have known each other since college and have worked together on multiple projects over the years, making this a natural opportunity to work more closely together while preserving Debmat’s brand, team and culture.
Speaking on behalf of the incoming leadership team, Nick Shilling says: “We are thrilled to be joining forces with John and his outstanding team at Debmat. We are excited to have the opportunity to help grow the business further, exploring new complimentary service lines and expanding into new geographies with clients who see Debmat as a trusted partner. We are grateful for the support of the whole Debmat team, as well as the advisors and partners who have supported us in making this opportunity a reality.
“The NEL team and our legal and advisory partners provided fantastic support at all stages of the transaction, confirming that we chose the right partners to join us in this transaction. We look forward to continuing our relationship with them as we grow.”
Rachael Munro, Investment Executive at NEL adds: “Debmat is a fantastic business with a strong reputation, a skilled team and real momentum for the future. We are delighted to support this next chapter and back an experienced leadership team with ambitious plans to build on the company’s success and create further opportunities for growth. It was a pleasure to work alongside all of the advisers involved, and the collaborative approach throughout the process was instrumental in ensuring a smooth and successful transaction.”
The investment opportunity was referred to NEL by Peter Cromarty of CCBS Group and together with Barry Gill of TIG Corporate Finance, the pair were instrumental in structuring the deal, working with NEL and the legal teams to ensure a smooth transaction and positive outcome for all parties.
Peter Crommarty, Founder of CCBS Group commented: “It was obvious at an early stage to us that this was a fundable deal. Getting the structure correct was the main concern and we have found that balance with the deal. The management team are very experienced, and it was great to work with them to get the right result. I will be delighted to see this business and the new team take this business to the next level”.
Barry Gill, Director at TIG Corporate Finance said: “Having worked within the road maintenance and surfacing sector for a number of years, I was already familiar with Debmat's strong reputation in the industry. Living only a short distance from the company's base, I've also been aware of the quality of the business and the excellent work it has delivered across the region.
“It was therefore particularly pleasing to advise on this management buy-in and support the incoming management team throughout the transaction. They have built an excellent reputation of their own within the North East business community, and I have every confidence that their experience, relationships and ambition will help drive Debmat forward into its next phase of growth.
“This is a fantastic example of a strong regional business being backed by a capable and highly regarded management team, and I wish everyone involved every success for the future."
The legal side of the transaction was supported by Hill Dickinson LLP acting for Debmat, Muckle LLP acting for NEL, and Swinburne Maddison acting for the sellers.
Sarah Newbould, Senior Investment Manager at the British Business Bank said: “Through the Northern Powerhouse Investment Fund II we are proud to be backing engineering and infrastructure businesses like Debmat Surfacing that sit at the heart of the UK’s Modern Industrial Strategy. Investments like these are key to helping strengthen regional construction and civil engineering capacity, create highly-skilled jobs and drive long-term economic growth across the North.”
Operated by British Business Bank, the £660m Northern Powerhouse Investment Fund II covers the entire North and provides loans from £25k to £2m and equity investment up to £5m to help a range of small and medium sized businesses to start up, scale up or stay ahead.
The purpose of the Northern Powerhouse Investment Fund II is to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses across the North. The Northern Powerhouse Investment Fund II will increase the supply and diversity of early-stage finance for Northern smaller businesses, providing funds to firms that might otherwise not receive investment and help to break down barriers in access to finance.
NEL Fund Managers are also managing NPIF II – NEL Smaller Loans which offers investments from £25,000 to £100,000 to new and growing businesses.
For more information about NEL, please visit www.nel.co.uk or contact the investment team on 0345 369 7007.