29/07/2013 - 07:05

ICON founder leads Pressure Dynamics buy-out

29/07/2013 - 07:05

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ICON founder leads Pressure Dynamics buy-out

Specialist hydraulics manufacturer Pressure Dynamics will resume trading today as a new entity after its assets and trading name were acquired over the weekend by a consortium of three local engineering businesses.

The purchase occurred seven weeks after Fluid Power Technologies, trading as Pressure Dynamics, was placed in administration.

The new Pressure Dynamics will be chaired by Derick Markwell, who was a founder of ICON Engineering and, after selling out of that business in 2009, established TENSA Equipment.

Joining him as a new owner will be Bo Szalek, a South African migrant who purchased long-running Malaga business Prime Motion and Control in 2009.

Also joining the consortium will be Joel Rawlings and Greg Moore, whose commercial interests include newly-established explosive equipment business Evolution Resource Group.

The new owners of Pressure Dynamics had previously traded with the business, buying its products for their own businesses.

After the change of control transaction, Pressure Dynamics will resume trading today with 27 staff, well below the peak of 90 staff it had before being placed into administration in early June.

It will have just one of three buildings the business previously occupied at Perth airport industrial estate.

Mr Markwell told Business News that Pressure Dynamics would be “lean and mean” with a focus on efficiency, tight financial management and rebuilding customer relationships.

He also sees significant growth potential servicing the liquefied natural gas (LNG) and mining sectors.

“We see it as a great opportunity,” Mr Markwell told Business News on Sunday.

“We’re going back to build relationships with all of the customers.

“All of the clients we’ve approached already, want to start business again on Monday.”

Mr Markwell emphasised that the consortium had bought the physical assets, the intellectual property and the rights to use the business name, and that all liabilities remained in the parent company Fluid Power Technologies.

He was critical of the company’s former management, saying its products were world-class but its business systems were found wanting.

“There were rooms full of paper files,” Mr Markwell said.

“Their systems were not able to predict they were going over the cliff until they hit the bottom.”

He said investing in improved business systems would be a priority.

Mr Markwell was also looking to expand into international markets – where his business, TENSA, already operates – and to add additional product lines, such as servicing offshore cranes.

In a related transaction, Mr Szalek’s business Prime Motion and Control recently bought the rights to the Smiths (WA) product lines.

Smiths’ range of power units and small bore hydraulic cylinders was previously manufactured by Pressure Dynamics.

Prime made the official acquisition of Smiths on July 1.

As part of the deal, Smiths' stock was moved to Prime’s premises in Malaga and manager Steve Briggs also transferred over.

Pressure Dynamics was established in 1979 and became a market leader in the supply, service and engineering of hydraulic technology, serving the oil, gas and mining industries.

Grant Thornton was appointed administrator of Pressure Dynamics in early June and PPB Advisory was appointed receivers and managers on June 7.

"The sales process generated interest from a significant number of parties due its excellent reputation within the industry and highly regarded employees," PPB Advisory partner and Pressure Dynamics receiver, Simon Theobald, said in a statement.

"With the cooperation of key customers, suppliers and employees, we were able to continue to trade on the business while the sale was completed. This sale is a positive outcome for Pressure Dynamics and we wish the new management team every success as they continue to grow the business."

Mr Theobald said the sale would provide sufficient funds to pay in full all outstanding entitlements to employees not transferring with the business.

 

 

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