In many respects, both SMS and A1 are a perfect fit and provide us with a sound framework for going forward. SMS specialise in offshore crane and lifting operations, ranging from the design and implementation of large lifting and crane projects, to providing crane personnel and designing special purpose lifting equipment. The company has 130 staff working in Aberdeen, Norway, Abu Dhabi, Qatar, Malaysia and Singapore and joint managing directors, Bert Middleton and John Morrison and all senior management will remain with the new company, initially trading under the name EnerMech SMS.
A1 provides safety training for crane and lifting operations and has purpose built training facilities in both Great Yarmouth and Aberdeen where they also have a state-of-the-art crane simulator. Senior staff, including managing director Rod Leech and general manager Phil Caton, will remain with the new company trading under the name EnerMech-A1. The acquisitions brings EnerMech's payroll up to 200 and we are currently in negotiations to purchase an overseas company.
These two deals are very good news for the staff and customers of both SMS and A1. Our management team have a strong record in dynamic but managed growth and we are looking forward to bringing all that experience to bear in growing these new additions to the EnerMech organisation.
The EnerMech management team – Michael Buchan, Derek Grant, Phil Bentley and myself, have all worked together before as part of the MBO which rescued PSL from receivership in 2003. In a four year period we took PSL Energy Services from a £20 million a year, predominately UK based business, to an eastern hemisphere company with a £110 million turnover and 1200 staff before the company was acquired by Halliburton in July 2007.
With an initial capital investment of more than £30 million by the four management shareholders and private equity firm Lime Rock Partners, we have the resources to realise our vision of developing the EnerMech brand through a combination of capital investment, rolling out new services and further acquisitions.
Founded in 1998, Lime Rock Partners is a creative, long-term investor of growth capital in global energy companies in the exploration and production, energy service, and oil service technology sectors, and has $3Bn under management. It was Lime Rock who backed our MBO at PSL and then underpinned the phenomenal growth we enjoyed by further capital investment in equipment and facilities, and the rekindling of that relationship is a vote of confidence in EnerMech's aspirations to become a significant player in the international mechanical services sector.
The current service provision in the market segments we are targeting is quite fragmented and we have identified gaps where we think we can offer a lower cost and more responsive service than is currently being provided. We plan to deliver a much greater level of engineering and technical support than our competitors can offer.
In time we will add other service lines to the EnerMech offering but the common thread will be that our core business revolves around a solid mechanical engineering capability, be that in support of rentals, repairs, supply, personnel or training.
A clear differentiator between us and others in the market will be our more effective utilisation of resources. Having already invested heavily in state-of-the-art technical software and advanced management systems we will be able to support a number of different business lines with the same engineering group. We will be more cost effective and will be able to deliver a greater depth of technical support for engineering analysis, diagnostics, maintenance performance improvement and providing new solutions.
Our emphasis is on 'delivering mechanical equipment solutions' and so we will not restrict ourselves to simply playing the role of maintaining and like-for-like replacement of existing equipment. Instead, we will look at ways of improving the functionality of a client's equipment, increasing efficiency and in some cases redesigning equipment or replacing it with modern alternatives.
Another EnerMech priority will be an uncompromising focus on safety. We understand the high safety performance expectations of our clients, particularly in the type of services we provide. We will build on the existing safety culture which is already well established by ensuring we help all of our people develop the right leadership skills in safety and provide them with tools and training to focus on reducing risk.
At the moment both SMS and A1 enjoy a very good reputation for the professionalism of the training they offer not only to their own staff but externally to customers. We will be looking to build on that and broaden the offering out with the lifting and cranes sector to our other business lines and to provide a broad range of mechanical training and competence assessment.
Through the acquisition of SMS we have the multiple advantages of an existing international infrastructure in the Middle East and Asia but a priority will be to strengthen that presence across the eastern hemisphere, with additional bases in places such as Baku, North and West Africa, Australia and possibly South Africa. This will give us the reach to provide our full range of services in each of these locations and makes us more accessible to customers and responsive to their needs.
In the North Sea equipment rental market, many of the existing competitors have limited technical back up whereas we have already invested in a management team and systems to ensure all our equipment is fully compliant with all the HAVS, PUWER, ATEX and Hazardous Area regulations.
We have had a very positive reaction from the market and already have more than 30 customers who have equipment on hire from us. We have registered with FPAL and have an integrated management system in place which complies with the requirements of ISO 9001/14001 and OHSAS 18001. New equipment is arriving daily and we are already looking at custom building equipment to meet specific customer's needs.
We have a clear vision of what we can do for the rental equipment market and the addition of other service lines will be announced shortly. Some of these products and services will grow organically but we are also looking at possible acquisitions that fit with our strategy and that will widen both our capability and geographic footprint.
Our objective is to offer the same responsive, competitively priced, service based ethos which we championed at PSL and our ambition is to grow EnerMech in to a company with a significant footprint in the eastern hemisphere within five years.
In tandem with significant capital investment across our business, we will be investing heavily in our people. To grow our business rapidly, we recognise we need to bring in the right calibre of people and to develop their skills and competency and we are in the middle of an extensive recruitment campaign and will be making a series of high profile appointments in the coming months.
EnerMech is currently based at Stoneywood, Aberdeen, but are seeking premises which are suitable for an international headquarters and large enough to accommodate our staff, equipment and training facilities now located at Stoneywood and at SMS and A1's facilities in Dyce.