ERM (Environmental Resources Management), the world's leading provider of environmental consulting services, today announces that it has completed the acquisition of the business through a management buyout in partnership with private equity firm Bridgepoint. The transaction values the business at US$535 million.
As a result, ERM management and employee shareholders will hold a 42% stake in the business with Bridgepoint holding the 58%balance. A significant number of employee shareholders rolled over a substantial portion of their proceeds from the sale to re-invest in the new business. ERM has over 100 offices in 39 countries and employs over 2,500 staff. In the year ended 31 March 2005 it had gross revenues of US$425.4 million and EBITA of US$38 million.
The business has a multinational client base and a focus on five core service offerings:
In 2001, the business was the subject of a management buyout led by Robin Bidwell, Executive Chairman, and Peter Regan, CEO, following the retirement of several ERM Founders. 3i acquired a 52% stake in the firm at that time. The sale of this stake (along with the 48% stake held by ERM's employee shareholders) has created the opportunity for Bridgepoint to invest. The company has generated consistent organic growth, particularly as a result of ERM's Key Client Programme, which focuses on providing consistently high quality environmental consultancy services to the world's largest global corporations.
Commenting on the completion of the transaction, Dr Robin Bidwell, executive chairman of ERM, said: "ERM is the leading player in the environmental consulting sector, one that continues to grow by the day. The environment continues to be at the heart of international, national and local government legislative agendas. With offices in 39 countries, we are able to meet our clients' needs anywhere in the world and which forms the foundation of the growing our business as we enter our next phase of growth."
In Bridgepoint we have found a private equity house that both supports our business plan and has a profound insight into the complexities of running a people business. With over 400 employee shareholders investing in the organisation, I believe that ERM, in partnership with Bridgepoint, can drive the company forward for the benefit of all stakeholders in ERM."
For Kevin Reynolds, partner at Bridgepoint, ERM operates in a highly attractive market with long term growth rates and a number of high growth sub-sectors. "The environment is now at the very heart of many key business decisions, driven by increasing environmental legislation, the need for greater self-regulation and general compliance. As the leading specialist in its field, ERM would naturally be expected to exploit these opportunities and achieve strong growth in the coming years." he said.
Debt for the transaction was provided by Bank of Scotland. Advisers involved in the transaction included: for Bridgepoint - Rothschild (corporate finance), Weil Gotschal & Manges (legal), LEK (market due diligence), Ernst & Young (financial due diligence),; for vendors - Close Brothers (corporate finance), BTI (vendor due diligence), SJ Berwin (legal), PWC (financial vendor due diligence) Kinmont Advisory (management advisory); for Bank of Scotland - Ashurst (legal).
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