A management buy-out was a key turning point for Welshpool firm QED Occtech.
WHEN global engineering company Hatch bought Welshpool-based water treatment firm QED Occtech last month, it was the culmination of a five-year turnaround following a management buy-out.
Former QED chief executive Peter Snowsill told WA Business News the deal was testament to the business model pursued by the founding directors after they bought out, and privatised, the business.
"It's satisfying for the directors who took the stand to undertake the MBO and see changes to the business model and new pursuits yield great results, to where we'd be in a position to be attractive to a company like Hatch," Mr Snowsill said.
QED Occtech was formed in 2002 when the public-listed QED merged with Occtech Engineering.
It struggled to deliver consistent financial results and, two years later, the senior management team acquired full control, shifting the focus back to the core business and being more selective in the contracts they chased.
"The business sought to pursue a specific range of work. We established a business model based on multi-phased engagement with a small number of key clients, delivering high-end technical solutions, building on the foundations we always had," Mr Snowsill said.
"We stopped tendering for the more competitive work and moved into regular work with key clients."
The company has since worked with local clients including Minara Resources, Alcoa and BHP Billiton Nickel West, and secured its so-called 'headline' project with US-based phosphate producer Mosaic Company.
The sale to Hatch, for an undisclosed sum, emanated from a strategic review.
"The business was growing organically over the past four years, since the MBO, on the back of project success. We started to grow reasonably rapidly," Mr Snowsill said.
"The organic growth path had its limitations and we were considering how to get more capital to underpin that growth.
"We started to look at the sorts of things we might need to add to the business to grow it, and that was strengthening our engineering horsepower and looking at getting access to more global clients."
For Hatch, the acquisition will add to its water group and broaden its water services offering to its mining, mineral processing, renewable power and infrastructure clients.
Mr Snowsill, who has joined Hatch as a director of its water services business, is looking forward to new opportunities in the growing area of water management.
He expects the team from QED will significantly bolster Hatch's water group in WA and enhance the group's exposure to opportunities in local water and infrastructure related projects.
"The issue of water scarcity and cost of using water is ever increasing and environmental pressures are increasing. And in the context of the current economic conditions, producers and mineral processors are looking at their cost of production and at their efficiencies," Mr Snowsill said.
