The business

SMD is the world’s leading privately-owned designer and manufacturer of subsea vehicle systems and the world’s second largest supplier of Work Class Remotely Operated Vehicles (WROVs) – unmanned submarines that are able to lay subsea cables and pipelines in depths and conditions that would be otherwise inaccessible for human divers.

Established in 1971 by the Reece family, the company dominates the market for supplying subsea vehicles to bury fibre optic cables for the telecoms industry. 90% of the world’s fibre optic network has been laid by vehicles manufactured by SMD. Today the company employs 135 people and supplies primarily the oil and gas sector. It also provides bespoke equipment for the telecoms, renewable energy, mining and defence industries. It has carried out long-term developmental research into the installation of offshore tidal-based renewable energy projects.

SMD has an excellent market position in a growing market – with annual spend expected to increase by more than a third over the next three years. As a result, the business has a very strong order book. In addition, the investment by Inflexion allows the business to fund further international development and accelerate growth.

The investment

SMD is our third oil and gas-focused investment in recent years and the sector together with the wider energy industry, continue to be areas of focus for us.

The £70 million buyout was led by John Hartz, Tim Smallbone, Catherine Richards and Malcolm Coffin on behalf of Inflexion. Both Tim and Catherine have joined the Board of Directors. Funds managed by Inflexion invested £25 million for a majority equity share. Both management and the vendor invested and a package of debt facilities was provided by HSBC and Barclays.