Two Teesside firm have been taken over in deals which reflect changing growth plans across the region.
Teesside chemical and gas inspection services company R & A Kay (Rak) has been acquired by risk management experts BES Group in a deal which creates a 40-strong Stockon and Middlesbrough team.
Rak was originally formed in 1984, before its acquisition by Executive Chairman Duncan Jarrett in 2007, and provides inspection services for the onshore oil and gas, petrochemical, industrial gases, chemicals and utilities sectors, across the UK and Europe.
As part of BES Group, Rak will continue to support customers such as Shell, Esso, BP and the National Grid. BES Group approached Rak in December 2023 as part of a continued acquisition strategy, which has seen the business - backed by mid-market private equity firm, Inflexion – acquire nine companies over the past 20 months.
John Campbell BES Group Chief Executive Officer said: “Rak Inspection Services is another fantastic addition to our company. Growth by acquisition is important to us at BES Group and we are focused on welcoming businesses that support our customers’ needs with industry-leading teams and solutions. We are confident we have done just that with Rak.”
Phil Jackson, Managing Director of Rak Inspection Services said: “We’ve had a really exciting time over recent years and are now looking to take the next step in our growth journey. As part of BES Group, we know we will be able to build on everything we have achieved so far.
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Rak sought the advice of David Wilson, Corporate Finance Partner for Armstrong Watson in the North East and Cumbria to assist with the preparation, evaluation and negotiation of the sale, alongside legal advisor Martin McKinnell of The Endeavour Partnership.
Lead Corporate Finance adviser David Wilson of Armstrong Watson said: “Rak is a hugely impressive, North East business and we were delighted to work with the team and The Endeavour Partnership to deliver this significant transaction. The acquisition by BES Group allows Rak to build on its ongoing growth and we wish the team the best of luck and look forward to following their progress”
Martin McKinnell of The Endeavour Partnership and Rak’s Legal Advisor added: “Having acted for Rak since dealing with the original acquisition back in 2007, it has been a pleasure to support them and their shareholders through this sale process. This deal opens up fantastic opportunities for the company and its management team, and I’m excited to see how they will thrive as part of the BES Group.”
Both Phil Jackson, Managing Director, and Ian Chapman, Senior Finance Manager, will remain in the business to oversee the future growth of the business.
In Stockton, a need to increase the warehouse capacity for Direct Line Supplies has seen the company purchase a new business.
Direct Line Supplies purchased Mercurial Properties for an undisclosed sum, in order to take over the warehouse at Lockheed Close, Preston Farm Industrial Estate.
The company will use the facility to increase its buying power of food supplies, which it imports and exports around the world, while also creating capacity for other businesses to use some of its storage space under a new business name, Linxport.
Direct Line Supplies director Pedram Salahshouri engaged Jacksons Law Firm, which also has a base on Preston Farm Industrial Estate, to complete the purchase of Mercurial Properties and its warehouse.
Pedram Salahshouri, Director of DLS, said: “We now have this 180,000 square foot facility and this will elevate Direct Line Supplies as a business, as well as enabling us to set up Linxport to rent out storage space for other businesses.
“Direct Line Supplies was established in 1988 as a food service company exporting into Europe and the Middle East, as well as importing food and packaging to be redistributed around the UK and abroad, with end users including schools, hospitals, restaurants and fast-food outlets.
“We had outgrown our current, 55,000 square foot site at Teesside Industrial Estate and we were searching for more expansion possibilities within infrastructure and logistics, so when we came across Mercurial Properties’ site we saw how we could maximise the potential of our business.”
Pedram adds the new facility can hold between 15,000 and 20,000 pallets and this means Direct Line Supplies can now bring in more stock and increase its buying power.
Having a bonded warehouse facility will also enable them to “bypass all the supply chain issues that have taken place since Brexit”.
Tony Wentworth, managing partner at Jacksons Law Firm, said: “I have worked with DLS for at least 20 years and I was very pleased that my team was able to support the company with this transaction after seeing it outgrow its existing premises due to its years of success.
"We were happy to be able to support DLS with this purchase, which will enable it to grow its current business at the same time as diversifying its offering.”
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