Middle-east take-over will strengthen Bridge

Jun 26 2008 by John Rowbotham

A MIDDLE East company have taken over one of Lanarkshire’s oldest companies.

Bahrain-based Kuwait Finance House have acquired a majority stake in Motherwell Bridge.

The engineering company hope the backing of KFH will strengthen their business in Middle East.

Yesterday (Wednesday), a spokesman for the Lanarkshire company said the change did not pose a threat to the company’s 800 staff.

Motherwell Bridge will retain their headquarters in the town’s Logans Road.

And the management team behind a successful management buy-out of Motherwell Bridge two years ago will continue to run the company.

Interest from the Middle East in the group’s activities has been growing steadily following the launch in 2007 of the new division, Motherwell Bridge International Ltd.

Hugh Hayes, Motherwell Bridge chairman, said: “We increased our emphasis on the international business two years ago, and took the decision last year to split our engineering contracting business into two separate companies, one concentrating on the United Kingdom and one overseas.

“Although it is early days, we can see momentum building in the region, and I won’t be surprised if within three years from now we are earning as much from outside the UK as we are from within.

“That is certainly our intention, and having a Middle Eastern-based majority shareholder can only help us achieve this goal.”

Abdulhakeem Al Khayyat, managing director of KFH, said: “We are delighted to add Motherwell Bridge to our portfolio of investments.

“We are backing a proven management team which we believe is capable of delivering significant growth by acting as specialist engineering sub-contractors in the oil, gas and petrochemicals sector.

“In particular, the opportunity in the Middle East is significant and we will work with management by utilising our presence and network in the region to convert this opportunity into a reality.”

Motherwell Bridge have a history dating back to 1898 but faced bankruptcy in 2003.

Hugh Hayes and 11 senior managers led a rescue of the business.

They paid £3.9m for a 26 per cent stake in the group with the balance bought by funds managed and advised by JOHCM Private Equity.

In the 10 months following the buy-out, the company posted trading figures that included profits before tax of £7.1m and a reduction in net bank borrowings to £700,000.

The profit figure was boosted by the sale in April last year of the company’s aerospace and design divisions to the incumbent management team.

In his statement this week, Mr Hayes said buy-out backers JOHCM Private Equity no longer held any shares in the group.

“Our tie-up with JOHCM Private Equity in 2006 gave us the umbrella under which we were able to divest our aerospace and inspection operations to allow us to concentrate on our engineering contracting activities,” added Mr Hayes.

“The sale of these operations, to management and to a trade buyer respectively, enabled us to push ahead with our plans and restructure the group earlier than anticipated.”

Motherwell Bridge have 300 staff who work from their site in Logans Road.

The group include MB Engineering Services – who do work for the oil and gas, petrochemical, pharmaceutical, and steel industries – and storage tank providers Motherwell Bridge International.