LSE's premium-listed Caledonia Investments acquires majority stake in Yorkshire company

London-headquartered Caledonia Investments plc has acquired a majority stake in Deep Sea Electronics Ltd (DSE) in a transaction that values the business at £162m.

Based in Hunmanby, Yorkshire, DSE designs controllers for diesel-powered electricity generators and intelligent battery chargers. It is staffed by over 170 employees and operates globally, selling to over 150 countries.

Its products are used worldwide to support public sector infrastructure projects and defence applications, as well as applications across industry sectors, including oil and gas, telecoms, construction, power distribution and facilities management.

Duncan Johnson, Caledonia’s head of unquoted investments, said: “We are proud to have become the new owners of DSE and to partner David Thomson and his team in the next stage of the company’s development.

“DSE’s consistently strong profitability, high cash generation and leading market position ideally fit our Unquoted pool’s investment criteria.

“We believe there are exciting opportunities to build further on DSE’s excellent record and to expand its global presence.”

Caledonia has subscribed £117.2m for a 98.9 per cent equity stake and has also provided a short-term bridging loan of £50m, which will be replaced in due course by external bank debt.

The management team has invested £1.7m for the remaining equity.

The acquisition represents the largest initial investment by Caledonia’s Unquoted pool since its inception in 2011 and is consistent with Caledonia’s strategy of investing in well-established private companies, with proven management teams, seeking long-term growth capital.

Ed Sheader and Stan Archer, co-owners of DSE, added: “As co-owners of DSE for nearly 40 years, we were keen to find a buyer who would be committed to the long-term development of the business and secure employment opportunities for the workforce.

“We are therefore delighted to pass the company on to Caledonia, with its backing by the Cayzer family and reputation as a long-term, supportive investor, and wish them and David Thomson and his team every success in the future.”

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