Hargreaves IPO

Hargreaves is a leading provider of bulk transportation and specialist support services to the energy and waste sectors. A strong entrepreneurial management team identified that the Group’s unique position in logistics offered significant potential to diversify into value added activities. Recognising the need for greater access to capital, following a competitive selection process, Brewin Dolphin’s Industrial Team was appointed to prepare the company for a flotation on AIM.

By its flotation in November 2005 Hargreaves, having grown successfully both organically and by acquisition, had already built a reputation for high service standards and a controlled entrepreneurial culture. Its pivotal position in bulk haulage allowed Hargreaves to identify and establish successful complementary operations in Waste Services, Minerals, Industrial Services and Coke production through a number of medium term contracts for a range of blue chip customers.

During the flotation process Brewin Dolphin’s Industrial team worked closely with the management to prepare the investment proposition. Exposure to growing markets, significant barriers to entry, strong cash generation and excellent visibility of earnings were all fundamental elements of the investment case.

£57.5m of funds were raised at the upper end of the valuation range allowing certain founding investors to release a proportion of the value they had created and providing £21.5m of business expansion capital. Shares were placed with a range of blue chip institutions most of which continue to support the company.

Hargreaves’ strong track record had already created significant value within the business yet the management saw more to come. This was demonstrated by share sale lock-ins that firmly aligned the interests of management and investors.