Debmat buyout paves way for growth

A North East civil engineering contractor and road surfacing contractor is preparing for its next phase of expansion following a management buyout backed by a seven-figure funding package.

Debmat Surfacing has been acquired through a Buy In Management Buy Out (BIMBO) supported by NPIF II – NEL Debt Finance, managed by NEL Fund Managers as part of the Northern Powerhouse Investment Fund II (NPIF II).

Founded in 1979, Debmat, which is based at the Stargate Industrial Estate in Ryton, has built a strong reputation for constructing and repairing roads, driveways and car parks, alongside delivering the groundwork and civil engineering that underpins projects across the construction, commercial, retail and education sectors.

The investment will support the company’s future growth under its new leadership team, which plans to introduce complementary remediation services to provide clients with a broader end-to-end offering while creating new jobs.

The incoming ownership team combines existing and new leadership.

Long-serving co-managing director John Turner becomes chairman, joined by former Thompson’s of Prudhoe managing director Nick Shilling and chartered accountant Ian Wilkin. 

The management team has also been strengthened by the appointments of Martin Barker as managing director and Ben Harris as commercial director.

Nick, who spent more than three decades at Thompson’s of Prudhoe and led the business through a period of significant growth, reviewed more than 25 acquisition opportunities before selecting Debmat alongside Ian. 

The pair, who have known each other since college and previously worked together on a number of projects, identified the company’s experienced workforce, strong reputation and growth potential as key attractions.

Nick said: “We are thrilled to be joining forces with John and his outstanding team at Debmat.  

“We are excited to have the opportunity to help grow the business further, exploring new complimentary service lines and expanding into new geographies with clients who see Debmat as a trusted partner.  

“We are grateful for the support of the whole Debmat team, as well as the advisors and partners who have supported us in making this opportunity a reality.

“The NEL team and our legal and advisory partners provided fantastic support at all stages of the transaction, confirming that we chose the right partners to join us in this transaction.  

“We look forward to continuing our relationship with them as we grow.”

The funding is expected to help Debmat broaden its service offering while building on more than four decades of experience in the North East's surfacing and civil engineering sector.

Rachael Munro, investment executive at NEL, added: “Debmat is a fantastic business with a strong reputation, a skilled team and real momentum for the future. 

“We are delighted to support this next chapter and back an experienced leadership team with ambitious plans to build on the company’s success and create further opportunities for growth. 

“It was a pleasure to work alongside all of the advisers involved, and the collaborative approach throughout the process was instrumental in ensuring a smooth and successful transaction.”

The transaction was referred to NEL by Peter Cromarty of CCBS Group, with Barry Gill of TIG Corporate Finance helping to structure the deal. 

Peter added “It was obvious at an early stage to us that this was a fundable deal. 

“Getting the structure correct was the main concern and we have found that balance with the deal. 

“The management team are very experienced, and it was great to work with them to get the right result. 

“I will be delighted to see this business and the new team take this business to the next level”.

Barry added: “Having worked within the road maintenance and surfacing sector for a number of years, I was already familiar with Debmat's strong reputation in the industry. 

“Living only a short distance from the company’s base, I’ve also been aware of the quality of the business and the excellent work it has delivered across the region.

“It was therefore particularly pleasing to advise on this management buy-in and support the incoming management team throughout the transaction. 

“They have built an excellent reputation of their own within the North East business community, and I have every confidence that their experience, relationships and ambition will help drive Debmat forward into its next phase of growth.

“This is a fantastic example of a strong regional business being backed by a capable and highly regarded management team, and I wish everyone involved every success for the future.”

Legal advice was provided by Hill Dickinson LLP for Debmat, Muckle LLP for NEL and Swinburne Maddison for the sellers.

The £660 million NPIF II fund, which is operated by the British Business Bank, provides loans from £25,000 to £2 million and equity investment up to £5 million to help a range of small and medium sized businesses, driving innovation and creating opportunities for businesses to grow, scale, and thrive.

Sarah Newbould, senior investment manager at the British Business Bank, added: “Through the Northern Powerhouse Investment Fund II we are proud to be backing engineering and infrastructure businesses like Debmat Surfacing that sit at the heart of the UK’s Modern Industrial Strategy. 

“Investments like these are key to helping strengthen regional construction and civil engineering capacity, create highly-skilled jobs and drive long-term economic growth across the North.”

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