Yesterday, Intertek Group plc announced it had acquired 3D laser scanning and dimensional control services provider Hi-Cad Technical Services Ltd, Dingwall, UK, from owners Ian Mackie and Dave Penman. The company reports it paid GBP 12 million (approximately $24 million) up front for the company and will pay an additional GBP 2.5 million (approximately $5 million) and GBP 2.1 million (approximately $4 million) September 2008 and 2009 respectively based on Hi-Cad achieving its financial targets.
Hi-Cad will be part of Intertek’s Industrial Services group headed by division president Jan Mueller-Seiler, who reports to Stefan Butz, Group Executive Vice President, Intertek Group plc. According to Butz, the acquisition allows Intertek to expand its testing, inspection and vendor assessment offerings to include dimensional control services for its industrial customers worldwide. Butz says the firm has seen demand from its asset owner customers to provide quality services not only for products which it provides currently but also for the assets themselves and contractors who construct and fabricate production assets.
For the immediate future, the company says it will be business as usual. Mackie says he and co-founder Penman are engaged for at least two years. Butz says the company has the opportunity to leverage Hi-Cad’s capabilities in new geographies, notably China and India, and in industrial markets beyond the petroleum and chemical sectors.
This acquisition is certainly good for the Hi-Cad founders, two of the hardest-working and savviest people in the industry, who built this business from zero starting in 1998 and grew it to 60 people with no outside capital. It also promises to be good for Intertek – this acquisition provides some differentiation from some other large quality service provider firms such as Bureau Veritas and SGS and allows it to expand its reach into new markets in wider geographies. We think this investment will also be positive for customers, particularly those with global project execution requirements who depend on dimensional control. The deal is good for service providers and solution providers too – nothing like an event such as this to stoke investment.
Intertek reported 2007 revenues of GBP 775.4 million (approximately $1.5 billion), up 22.5% from the year previous, with an operating margin of 15.7%. The company employs more than 21,000 people around the world.