Behind Our Investment: Subsea Technology & Rentals (STR)
A thesis-driven investment
As thematic investors, we are constantly researching markets and industries with long term systemic growth drivers and likely to contain attractive, actionable investment opportunities. One market that has been on our radar for some time is that of offshore wind. The UK has been a global market leader in the deployment of offshore wind farms for several years and over the past few, our investment team met with a number of technology and service providers to the sector, seeking out an opportunity with the right characteristics to be a fit for Baird Capital.
A high-quality buy-in CEO and an opportunity that fit
In 2020, we were approached by an M&A advisor working with an executive seeking to partner with a PE firm to invest in a leading products and services company that primarily services the offshore wind, aquaculture and marine infrastructure markets using clean and sustainable technologies. That executive was none other than Steve Steele, who now serves as CEO of Subsea Technology & Rentals (STR). We had clear alignment from the outset and from there, began to build a relationship, discuss ways of working, potential targets and value-creation opportunities.
Photo courtesy of STR
Steve had a well-researched list of targets in mind, and we spent numerous sessions walking through the target list, debating the pros and cons of each and fit with our skillsets. However, it was only a short time until STR emerged from the pack as the clear frontrunner. We had previous positive experiences in rental solutions providers with our successful investment in Watkins Hire. Allied with this, Baird Capital has evaluated several niche rental and “equipment as a service” businesses and have a clear view of what drives value in these businesses. Furthermore, STR is global, with a footprint matching that of our own, with facilities in the UK, US and APAC, making it the perfect candidate to benefit from our on-the-ground investment and operating resources.
A fast-growing, global independent subsea rental equipment and services provider
It was in 2021 that we met the founders of the business for the first time via videoconference to learn the STR story. Since 2011, STR has become a leading independent provider of subsea technology and services to the subsea energy market with a strong customer base built on culture, teamwork, commitment and responsiveness, with innovation at the core of its ethos. Headquartered out of Great Yarmouth, England, it was uniquely placed to be one of the pre-eminent providers of rental equipment and services to the burgeoning offshore wind market, and to follow its customers globally from there.
Director, Global Private Equity