Ironbridge completed a number of investments in October 2011 that form the basis for a buy-and-build investment in the outsourced services sector.

These investments follow on from the successful strategy employed in the Easternwell investment, a similar “buy-and-build “ investment in the mining services sector.

The initial investments focus on two sectors in the Australian economy which are forecast to grow strongly;

  • Oil and Gas, with more than $100bn in new LNG developments forecast in WA and QLD, and
  • Telecommunications (which includes the $40bn rollout of the National Broadband Network).

Ironbridge sees an opportunity to build a new diversified services business, initially servicing the Oil and Gas and Telecommunications Sectors, which focuses on the efficient delivery of specialist people and assets.

Company Description

AOS operates across crew vessel chartering and maritime consulting services.  OMA owns and bareboat charters (without crew) two anchor handling tug supply (AHTS) vessels.

Both businesses are experiencing strong growth driven by the levels of activity in the North West Shelf of Western Australia. Projects such as Gorgon, Pluto, Wheatstone and Ichthys are all committed and progressing to the construction phase, which has led to increasing levels of demand for offshore support vessels.

This is expected to continue into the near future as Australia’s south-east Asian trading partners seek to secure long term LNG supply.

ISG Management (ISGM)

 Sector  Telecommunications
 Industry  Outsourced Services
 Location  Australia
 Investment Date  October 2011

Company Description

ISG Management (ISGM) provides outsourced services to the telecommunications sector.

ISGM has formed a partnership with Telstra to provide all external installations and maintenance services.  The new national contract will see ISGM take over the management of all subcontractor customer installations and maintenance (including faults) for telephony, broadband, ULL and jumpering activities between Telstra exchanges and customer premises.

Investment Rationale

Major attractions of the Diversified Services Group opportunity were:

  • The respective markets are set for strong growth over the next few years;
  • Very experienced management teams in both businesses.  They have a wealth of experience and are well regarded in the industry by customers and peers;
  • Opportunity to add value to these companies by leveraging the scale of the businesses through investment in systems and processes;
  • Opportunity to deploy further capital through both organic and acquisition opportunities; and
  • An attractive exit market for businesses in these sectors as either individual companies or as a listed diversified services company.

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