Graphite Capital backs £86m NES buyout

Bridgepoint has made more than twice its money in the £86m secondary buyout of NES, a specialist recruitment firm, to Graphite Capital.

Graphite Capital, a UK mid-market private equity firm, has backed a £86 million (€127 million) secondary buyout of NES Group, a technical recruitment business for the oil and gas, infrastructure, rail and power sectors.
Ernst & Young ran the auction process for NES, which also considered a flotation earlier this year. Royal Bank of Scotland provided debt financing for the deal.
Graphite Capital has taken a 64 percent stake in NES, alongside management. As part of the transaction, the firm has appointed Stephen Ross, a former 3i executive and current chairman of Springboard, a venture capital business backed by Graphite Capital, as a non-executive chairman.
The investment was made from Graphite Capital VI, a £375 million vintage-2003 fund, which is now 67 percent invested and has made 12 investments.
Bridgepoint, a pan-European mid-market firm, is selling NES Group alongside founders Geoff Lloyd and Bryan Sullivan. Bridgepoint invested £13.9 million in a £32 million buyout of the business in May 1999.
A source close to the deal said that Bridgepoint more than doubled its money in the sale to Graphite Capital. NES was an investment from Bridgepoint Europe I, which raised €1.5 billion in 1998.
Founded in 1978, NES operates out of seven offices in the UK, with a further seven based in the US, the Middle East and South Africa. The company has approximately 2,400 contracts in 40 countries, providing contract clients to overseas projects such as the Dubai Metro, the Kashagan offshore oil project in Kazakhstan and the Nanhai petrochemicals site in China. The company said that turnover is anticipated to increase by 16 percent in 2006 to £177 million.
Graphite Capital’s other investments in the recruitment sector include the £25 million management buyout of TMP Worldwide from its American parent Monster Worldwide in May of this year; Huntress Group, in which Graphite Capital trebled its original investment in a £13.5 million refinancing in April 2005; and PSD, now OPD Group, which floated on the London Stock Exchange in 1997.