We were channelling our inner Brenda’s from Bristol last week on the news that yet another UK company has been approached for takeover by private equity. In this case European private equity firm Permira bidding £700m for Ergomed.  Ergomed is a true unheralded UK healthcare star. It runs early-stage drug trials and pharmacovigilance. These are multi-year contracts with high quality recurring revenue streams and Permira are bidding to take the business out at £13.50 (a 30% premium) although below the share price peak of almost £16 in late 2021. 

It's a shame to see businesses like this go, when they’re yet to realise their full potential, but sadly this is another sorry indictment of the lack of support in the UK equity market in general.  I’m afraid this won’t be the last time we see private capital cherry pick the best of British stocks. 

It is not all glum news in the portfolio though. Over the course of the summer we initiated a new position in Ashtead Technology PLC.  Ashtead Technology (AT) provides equipment rental, advanced underwater technologies & integrated support services to the global offshore energy sector. Their service is critical to many offshore energy activities, including wind, oil and gas. Founded in 1985, AT now has 260 employees globally, supporting customers in over 80 countries, and have worked on over 220 projects. 

Just over a third of their revenue comes from offshore wind projects (mainly site characterisation and construction & installation). This renewable segment is fast growing. AT have made 7 acquisitions since 2017 and have over 19,000 rental assets, including a rental fleet costing £129m. FY22 revenue was £73.1m and EBITDA was £20.1m. They have a clear growth strategy both organically and through M&A and we feel is a strong fit for the portfolio. 

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