Manchester-based Palatine Private Equity has supported the management buyout of Gateshead-based testing, inspection and certification (TIC) business Lucion Services.

The investment from Palatine, together with a debt funding package provided by HSBC, provides an exit for founder shareholders, and will allow the business to continue its buy and build growth strategy.

Founded in 2003, Lucion is a risk management group focused on hazardous materials, with a market-leading presence in the asbestos compliance market.

Operating UK-wide across a range of sectors including retail, housing and marine, Lucion uses its bespoke NexGen operating software to service a wide range of clients in the public and private sectors.

The company employs more than 300 people, with its growth to date being driven both organically and through acquisition.

In 2011, Lucion completed the purchase of Leicester-based AOH Limited, before adding asbestos and environmental consultancy Redhills in 2016.

The deal sees Palatine back the incumbent executive management team, comprising CEO Phil Rozier, chief risk officer Ross Boulton and chief operations officer Adam Mead.

Jamie McGivern, who previously worked with Palatine at insurance broker Chase Templeton, joins the business as chief financial officer, and Patrick Morton, co-founder of Lucien, will continue with the business in an advisory capacity.

The deal was led for Palatine by Gary Tipper, Ed Fazakerley, Kieran Lawton and James Winterbottom. Lawton and Winterbottom will join the board as non-executive directors.

The investment was made from Palatine’s Fund III, which closed at £220 million in June 2015.

The investment in Lucion gives Palatine further presence in the Yorkshire and North East region, alongside existing portfolio companies Icelolly and ZyroFisher.

Palatine were advised by Gateley, Grant Thornton and RSM, with financial due diligence provided by BDO.

Park Place Corporate Finance led the deal for the vendors, with Watson Burton providing legal support.

Kieran Lawton, investment director at Palatine Private Equity said: “With deaths from asbestos-related illnesses continuing to rise, there is a clear, ongoing need for the quality of service that Lucion provides.

“We have been impressed with the company’s development to date and are very much looking forward to working with Phil and the team on the next stage of the company’s journey.”

James Winterbottom, investment director at Palatine Private Equity, added: “Lucion represents an exciting opportunity to back a market-leading business within the testing and inspection sector.

“With its scale and national infrastructure, together with its industry-leading NexGen operating system, we can see a clear opportunity to work with the team to accelerate the company’s growth both organically and through further acquisitions.”

Lucion Services CEO Phil Rozier: “I’m delighted to be able to pick up the Lucion baton and build upon what is already an excellent platform for growth.

“Lucion has always had ambitious growth plans, which can now become a reality with the support and investment from Palatine.

“It was important for Lucion to find the right partner, one that can not only assist with the funding of acquisitive growth but also offer a wealth of experience and knowledge to help guide us through the challenges ahead”.

Patrick Morton, co-founder of Lucion Services, said: “[Co-founder] Charles Pickles and I are proud of what has been achieved at Lucion to date.

“Going forward, the company’s market-leading position will be further strengthened by the support that Palatine’s involvement will offer.

“This is a very exciting time for the business as it is positioned for further growth under the leadership of the existing management team”.