M&A consultants advise LDC on investment in maritime player Idwal
Shipping inspection firm Idwal Marine Services has secured a significant investment from private equity partner LDC. The investor was advised on the move by consultants from firms including KPMG, OC&C, BDO and EY.
While the broader deals market has seen a marked slowdown in the last year, shipping is one of the segments keeping merger and acquisition experts busy, amid more favourable conditions – including the enhanced importance of supply chain fundamentals in the wake of the pandemic. As a result, shipping equities have outperformed the market – with tanker stocks up an average 235% in 2022, alongside bulkers seeing a rise of 121%, and container owners rising 61%.
Based in Cardiff, Idwal Marine Services is an inspection services firm, focusing on the global commercial shipping sector. The company provides vessel condition and integrity inspection services, fleet monitoring and data services for customers across the marine industry, supporting ship owners, brokers, ship operators, flag states, investors and other financial stakeholders when evaluating investments in marine assets.
These fundamentals have made Idwal an attractive prospect to investors, looking to tap into advisory offerings which can make the most of buoyant shipping M&A demand – while the rest of the market sees volumes sinking. To that end, Idwal has attracted a landmark investment from Lloyds Development Capital (LDC), a mid-market private equity house and subsidiary of Lloyds Banking Group.
Idwal will put the new backing into expanding its 55-strong headcount at its head office in Cardiff’s Caspian Point, in addition to a number of remote workers throughout the UK and internationally in Greece, China and Japan. Meanwhile, as part of the investment, Gehan Talwatte, an experienced chairman of private equity back businesses – including maritime data, insight and intelligence business Lloyd’s List Intelligence – has been appointed Non-Executive Chairman of Idwal.
The deal sees the exit of parent company Graig Shipping, which originally founded Idwal as a division of its operations in 2010. Graig is known as an entrepreneurial shipping business – best known in the sector for its innovative Diamond dry bulk new building series, which it contracted in the 2000s, placing 86 vessel contracts across six shipyards in Asia. After the sale of Idwal, Graig said it was already “well-advanced” in its next maritime venture to bring to the market high quality, environmentally friendly Service Operation Vessels for the rapidly growing global offshore wind and renewables sector, working with its global partners.
Nick Owens, CEO of Idwal, said, “This is the ideal outcome for both Idwal and Graig, as well as our customers and colleagues. As an independent company with the support of LDC, Idwal is strongly positioned to increase investment in its services and its international presence. The LDC team were exactly what we were looking for. Their local presence and successful track record in helping technology businesses develop and scale made them the ideal partner to support our growth plans.”
LDC’s investment was led by Dewi Hughes, Oliver Schofield and James Garland from its Wales & South West team. Hughes and Schofield will also join the board of Idwal.
Hughes commented, “Nick and the team have successfully built Idwal into a globally respected business with a reputation for sustainable and innovative services in an evolving marketplace. Now, with the opportunity to further develop its technology platform and further penetrate overseas markets, they will be able to fulfil their ambition to make Idwal the global leader and the Idwal Grade the pre-eminent standard in the international commercial shipping market.”
The private equity firm was also advised by a number of experts from the professional services industry, throughout the process. LDC received corporate finance advice from KPMG, commercial due diligence support from OC&C Strategy, financial due diligence from BDO, tax advisory from EY, and legal support from Blake Morgan. Meanwhile, on the sell-side, the management team of Idwal was advised on finance by Lexington, and legally by Capital Law. Graig was meanwhile given corporate finance advice from Stout, and legal advice from Taylor Wessing.
