Inflexion makes third investment in a month

Inflexion Private Equity, a UK lower mid-market private equity firm, has made its third transaction in a month and its investment in the oil and gas sector with the management buyout of SMD, a UK designer and manufacturer of sub-sea vehicle systems.

Deal terms were not disclosed. SMD’s management also took a small stake in the transaction, debt for which was provided by Barclays and HSBC.

Based in Newcastle upon Tyne, SMD manufactures remotely controlled subsea vehicles, primarily used in the oil and gas, submarine telecoms and oceanographic research sectors. The company’s vehicles range from work class remotely operated vehicles (WROVs) to specialised trenchers and mining machines. SMD employs 135 staff.

Inflexion said that SMD holds a strong position in the WROV market, where annual capex spend is expected to increase by more than 50% over the next three years as developers are forced to explore deeper waters and increasingly harsh conditions to satisfy sustained demand for oil and gas.

In March, Inflexion bought waste water support services business PIMS Group, followed by the £21m (US$42m) sale of Tekton Group, a specialist software business, to Sage.

Inflexion’s previous forays into the oil and gas sector comprise the £22m management buyout in January 2006 of Viking Moorings, which provides moorings solutions to offshore oil and gas drilling rigs; and PG Holdings, a now realised oil pump manufacturer acquired in 1999.

London and Manchester-based Inflexion is currently investing from a £165m fund, raised in 2006.