RSM’s corporate finance team has advised on the disposal of MEP consulting engineering practice Desco, to civil engineering firm Pell Frischmann, owned by the RAG-Stiftung investment foundation.
Headquartered in Doxford Park in Sunderland, Desco is an engineering consultancy business that offers innovative mechanical and electrical design solutions for building services. The business will become a wholly-owned subsidiary of Pell Frischmann, keeping its existing management board and structures in place.
The RSM team in Newcastle, led by corporate finance director Michael Cantwell with support from Lyndsey Everett (corporate finance) and Joanne Murnane (tax), acted for the shareholders of Desco on the buyout. Rob Thompson and Tom Pollard at Ward Hadaway acted alongside RSM as Desco’s legal advisors on the transaction. The acquisition offers enhanced UK and global reach for Desco allowing the business to take advantage of larger UK and international projects, particularly in the Middle East.
RAG-Stiftung Investment Company was set up to raise funds to finance the management of redundant coal mines in Germany and it continues to invest in market leading firms with international reach. The deal follows last year’s acquisition of Pell Frischmann, which saw the German investment company investing a majority stake in the engineering consultants.
The deal brings together two complementary businesses that will further enhance the offering of the Group through additional services and sector expertise, and increase market share across the UK and internationally – starting with expansion plans in Leeds and Manchester.
Paul Marshall, managing director at Desco, said:
‘This marks a new and exciting phase for Desco as we accelerate our growth strategy with the backing of a major international investor and Pell Frischmann’s expertise in the rail, roads and water sectors. RSM and Ward Hadaway have provided us with excellent support and advice throughout the process.’
Michael Cantwell, corporate finance director at RSM, said:
‘Desco has grown from a small start-up working out of the North East Business and Innovation Centre in Sunderland, into an award-winning MEP consulting engineering practice that has offices in the UK, the Middle East and the Far East. We’ve been working closely with the shareholders for over eight years and it’s great to be supporting them on a deal that will help facilitate the next chapter of growth for the firm.
‘The investment and the collaboration with Pell Frischmann brings increased critical mass allowing the business to seize larger project opportunities across the globe, particularly in the Middle East.’
Rob Thompson, corporate partner at Ward Hadaway, said:
‘We are really proud to have worked with Desco on this exciting transaction. The opportunities which this new union opens up, combined with the ongoing ambition and enthusiasm of Desco’s management board, promises an exciting time for the business, here in the UK and overseas. We look forward to seeing the results of their efforts over the coming years.’