A South Yorkshire-based component manufacturer for the oil services industry is to expand its product range after it was bought by its management.

ESS Steels, which makes downhole oil tools and well-head forgings, is under new ownership after managing director Duncan Milner and finance director Steven Horne acquired the company. Alex Miller, one of the original founders, has been retained as a consultant to the new owners.

The value of the deal has not been disclosed but it was supported by £12 million from Baird Capital Partners Europe, with Yorkshire Bank providing £35 million of debt. According to reports, the buy-out team invested £9 million in the deal.

The funding not only supports the buy-out but will also be used to grow the business with Horne saying that Baird’s funding will help management to develop the group’s services into new territories.

Baird Capital’s investment was led by Andrew Ferguson and James Benfield, while Yorkshire Bank’s funding was arranged by Robin Womersley and Kevin Hambling, directors of its Specialist & Acquisition Finance team in Leeds.

Ferguson said he decided to back ESS’ management due to the group’s continuing growth in the past three years and the popularity of the industry it serves. “The oil services sector has grown considerably in recent years, and this is expected to continue as investment is made in drilling rigs to find new reserves to meet increasing global energy demands.”

Baird and Yorkshire Bank were introduced to the deal by Patrick Abel, a partner at accountant PKF, who project managed the deal. Baird was subsequently advised on the terms of its investment by law firm Eversheds.

ESS has been trading since 1992 and operates from sites in Sheffield and Rotherham. Its subsidiaries include Engineering Special Steels, Ancon Special Alloy Steels and Sheffield Deep Bore.

The group provides semi-manufactured steel alloy-based engineering products to the oil field services sector.