WTR’s Willie Rennie is local to the north-east of Scotland, went to Aberdeen Business School and has logged more than 21 years in the oil & gas industry.
He worked for Mobil, Asco and RBG for seven years, and is now 18 months into his latest chapter with WTR. The difference this time is that he is, in effect, master of his own destiny, as Rennie owns a chunk of the firm and is managing director.
It was at RBG that Rennie says he plucked up the courage to change his life.
“I had seen others in my peer group who had successfully changed their lives through management buy-ins,” he said.
“I was particularly interested in the issue of systems integrity and decided to try and leverage my experience and contacts.”
RBG was in a state of flux and Walter Technical Resources was at a crossroads. This SME was, in essence, in need of stimulation and investment.
Timing is, of course, all.
Rennie: “I had spoken with a couple of people and they encouraged me to make the leap. I was director of energy services at RBG, which meant I was looking after two of the group’s divisions: manpower and a specialist recruitment business.
“The final push was waking up one morning and deciding that it was time to make the leap. I was away on holiday, had time to think, spoke with the family, came back and made the decision.
“I had nothing lined up as such, though I did have consultancy work while looking for the right opportunity to come along.
“That work was great for keeping me in touch with the market while I was hunting, and the WTR opportunity came through one of the accountancy firms. A2B had been given the mandate to sell the business; I pulled a team together: myself, Bob Forbes and Jock Gardner from Maven Capital; also the Clydesdale Bank and our advisers, Ritson Smith.”
Rennie’s timing was rubbish, in that he was trying to buy WTR when the banking community was in meltdown. Whilst an arrangement was secured with the Clydesdale Bank, the process was intense and slowed the deal significantly.
It took almost a year from the start in July 2008, to completion in June 2009.
And the price? “I’d rather not say, though my share of the business is 25%. Shareholders are Maven Capital, Rennie and Forbes, plus WTR’s prior majority owner, Tiny Langler, retains a small amount of equity.”
Despite the extensive due diligence, companies changing hands can harbour nasty surprises. So did Rennie recognise what he thought he had bought?
“I was very fortunate in that I managed to get quite a lot of access to the business as part of the diligence process, including speaking to customers. So I had a good feel for the business by the time the transaction happened.
“Once I got in there one thing that was particularly encouraging was that the potential I thought existed was being borne out.
“Our timing with WTR was, in many ways, spot on, as the upstream oil & gas industry was by 2009 paying more attention to the integrity of its infrastructure than at any time previous.”
In the year prior to acquisition, WTR turned over a little under £4million. In year one under Rennie, turnover was £4million and the estimate is £6million for the current year.
As far as Rennie is concerned the company’s performance has thus far matched both his expectations and those of his backers.
In essence, year one was about stabilising the business and getting ready for growth, an approach which he reckons has worked.
He also reckons the fact that Graham Birnie, who ran the business for Langler for some time, stayed on for nine months was a great help.
The leap from £4million to £6million in the current year is a big one, yet Rennie says it is perfectly possible. Indeed it seems to be in the bag.
The ambition is north of £7million for year three, though this is contingent on year two meeting expectation.
“We have just landed a particularly large contract in the Middle East which will be completed this financial year,” said Rennie. “That’s on the back of a similar project carried out for a client last year.
“We’ve opened in Angola and are already gaining considerable sales and WTR is also handling bigger projects. While the company is very well known for providing a fast engineered repairs response to clients, what we’re now doing with customers is increasingly working with them as a part of their integrity teams, identifying potential integrity issues a proactive manner, rather than waiting for a phone call.
“Where a lot of the growth is coming from is as a result of our working increasingly closely with our client base. Some of the work scopes that we’re now securing are very large and important to future growth.”
Also important is the fact that the proportion of overseas business is forecast to increase to 60%, compared to 40% for the UK market, also seen as a growth market.
New technology is being brought to the market, particularly a structural strengthening capability with long-term life-of-field repairs successfully undertaken on steel beams.
The firm is best known for its pipe work and pipeline repair track record. However, besides the structural strengthening technology, Walker is now in the process of launching an underwater engineered repair solution and has completed all product and application trials. The initial target market for this new repair system is caissons and risers, and the company is working with a number of clients on taking this forward.
WTR’s original focus was largely upstream, though Rennie says there is a significant upstream content to today’s business.
“We’re working at various receiving terminals in the UK. Some of the work we’re doing overseas is on petrochemical plants, especially in the Middle East.
“The entire client base is energy sector, including power. But we’re a small company and so we’re focusing resources on where we can get a return. That means mostly upstream.”
Rennie says he has been working closely with Scottish Enterprise to sharpen business focus.
“What’s come out of that is that we’ve probably distilled our strategy down to something much simpler: concentrating on a few things rather than many, not being distracted and focusing only on the three or four areas that really matter.
“Today we have 45 staff, that’s a 30% increase in personnel since the buy-in. We’re planning further increases this year to support the growth, and we’re expecting our headcount to increase to over 50 this year. We’ve put resources into Norway and the Middle East, we have more people in sales, have taken on more engineering personnel and six technicians. We will need to add more operational personnel as we grow.”
As for the headquarters, while Langler retained the site, Rennie is looking at redeveloping WTR’s HQ in situ. While warehousing is considered good, its office accommodation really needs replacing and doubling in capacity, plus the construction of new training and R&D facilities.
“We’re hoping to start the upgrade in March or April and to complete about five months on. We have building warrants and quotes from contractors,” added Rennie.
“This is all part of taking WTR to the next level.”