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Caledonia acquires Deep Sea Electronics

Caledonia acquires Deep Sea Electronics

Caledonia acquires Deep Sea Electronics – Caledonia Investments (CLDN) has announced that it has acquired a majority stake in Deep Sea Electronics Ltd (DSE)  The transaction values DSE at £162.0m.

About DSE

DSE is a UK based designer and manufacturer of controllers for diesel-powered electricity generators and intelligent battery chargers and is described in the announcement as world leading in this field. Its products are used worldwide to support public sector infrastructure projects and defence applications, as well as diverse applications across industry sectors, including oil and gas, telecoms, construction, power distribution and facilities management. Founded in 1975, the company is headquartered in Hunmanby, Yorkshire. It has over 170 employees and operates globally, selling to over 150 countries, both direct and through a comprehensive distributor network.

In the most recent audited consolidated accounts for its financial year to 31 May 2018, DSE reported a gross profit of £21.2m and profit before tax of £12.8m on turnover of £37.8m, and, at that date, had gross assets of £35.0m.

About the transaction

Caledonia has subscribed £117.2m for a 98.9% equity stake and has also provided a short-term bridging loan of £50.0m, which will be replaced in due course by external bank debt. The management team of DSE has invested £1.7m for the remaining equity. 

In the announcement, Caledonia states that the acquisition represents the largest initial investment by it’s unquoted pool since its inception in 2011, The company notes that the transaction is consistent with Caledonia’s strategy of investing in well-established private companies, with proven management teams, seeking long-term growth capital.

Comment from Duncan Johnson, Caledonia’s Head of Unquoted Investments

“We are proud to have become the new owners of DSE and to partner David Thomson and his team in the next stage of the company’s development. DSE’s consistently strong profitability, high cash generation and leading market position ideally fit our Unquoted pool’s investment criteria. We believe there are exciting opportunities to build further on DSE’s excellent record and to expand its global presence.”

Comment from David Thomson,Managing Director, Deep Sea Electronics

 “I am delighted to welcome Caledonia as DSE’s new owner. With Caledonia’s financial support, flexibility and long-term investment horizon, I am confident that we can build on DSE’s well-established reputation for product quality, technical capability and customer service to take advantage of the significant growth potential in our chosen markets.”

Comment from Ed Sheader and Stan Archer, co-owners of DSE

“As co-owners of DSE for nearly 40 years, we were keen to find a buyer who would be committed to the long-term development of the business and secure employment opportunities for the workforce. We are therefore delighted to pass the company on to Caledonia, with its backing by the Cayzer family and reputation as a long-term, supportive investor, and wish them and David Thomson and his team every success in the future.”

CLDN : Caledonia acquires Deep Sea Electronics

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