Exclusive insight from David Ridley, Managing Associate at WBD

In the changing economic landscape, the North East has shown ambition and drive that is attracting the attention of both national and international investors. Business investment headlines from across the region are becoming more common – especially in the energy sector.

Confidence grows as Memoranda of Understanding ("MOUs") or Letters of Intent ("LOIs") are signed for deals with the potential to create and continue to develop a larger skilled workforce.

One man who is at the centre of those conversations is David Ridley, Managing Associate at law firm Womble Bond Dickinson, which has bases within the region at both The Spark on Newcastle' Helix development and the recently expanded offices at Wilton Centre on Teesside.

As a hugely experienced corporate lawyer, David works across a wide range of sectors, but he has long been tracking the growth in energy sector investments and sees huge opportunities ahead for the whole region.

Working with serial acquirers, private equity investors and leading corporate finance advisers, he knows that the focus of attention of decision-makers across the UK and beyond is increasingly on companies deeply rooted in the energy sector.

“It’s all very promising for the North East,” David tells me.

David Ridley (Image: Press release)

“The whole team here is seeing a wave of companies move into the region with a significant focus on the energy sector and there is a lot of expenditure on large-scale energy projects in the North that WBD is getting involved in.

“We aim to meet as many energy sector businesses in the region as possible, whether they are new or well-established, in order to understand them and what we can do for them, and to develop long-term relationships. We are unique in that we are embedded in the region but as a transatlantic law firm are also able to bring a global perspective.

"We are regularly meeting with energy companies to discuss expansion plans, and with WBD's long history in the region and the sector, we can often connect companies with investors and other corporate finance advisers. It’s a very interesting and exciting space for me personally, but I think the opportunities for the region are huge.”

Leading the region's net zero transition

In its M&A Review for 2022, Experian Market IQ recorded 375 North East deals, valued at £3.7bn. The number of deals during the year increased slightly by one per cent, but the value soared by 27 per cent. There is various information to suggest that businesses in the energy sector are seeing the biggest increase in deal value.

What this shows is an increasing speed of change from conversations about opportunities to deals being completed, so the need for a voice of experience and calm guidance at the centre of so much activity is more important than ever.

David says: “The increasing value of deals isn’t just because energy sector companies are growing, but also because potential buyers and investors are understanding their true potential and are valuing them higher – certain businesses are seeing multiples of earnings applied which are closer to those we have seen in technology sectors".

Energy deals are changing the region (Image: Press release)

“We are clearly moving away from fossil fuels to a lower carbon energy society in the UK through some very innovative types of renewable technology, and that has a knock-on impact on the value attributed to businesses in renewables in the region and their success in seeking investment.”

The work that WBD has led on includes advising Envision on its multi-million pound car battery factory, currently being built near the Nissan plant in Sunderland, and SeAH wind on a deal to supply turbine foundations for the Hornsea 3 wind farm from their site currently being built in Teesside.

David singles out a recent PE backed deal he worked on that has attracted some attention in the local market, being shortlisted for North East Deal of the Year by Insider Media this year: “EnAppSys is based in Stockton, and was acquired by a Norwegian entity called Montel Group, which in turn was backed by global private equity investor Riverside (the management team reinvested into the wider Montel Group).

“EnAppsys are focused on energy sector data, working with companies to provide immediate and real-time access to all the energy market information and insight they might need, adding value through insight and forecasts".

“Since completing the transaction, we have been approached by businesses of a similar size in the sector asking if we can work with them to prepare them for investment or other form of acquisition"

With one deal leading to another and Womble Bond Dickinson’s reputation growing every time, the depth of experience in the firm is a vital component for potential clients.

He says: “WBD are very lucky compared to our competitors in that we have the ability to be sector focused, so while in our corporate team, I have an interest in the energy sector, we've got other people in the same team who have a particular focus on other sectors.

"As a full-service law firm with eight offices around the country, we have an expert in every facet of energy project development, alongside all other areas of law that a business may need. So when a client needs an answer, we are always able to deliver.

“Even more importantly, we have our knowledge specialists, who are designated with researching and updating us on changes to each sector. They are vital to our deeper understanding of the deals we are working on and can also flag opportunities that we might not have come across ourselves. I don't think a lot of our competitors have that resource.”

A world-leading example of industrial decarbonisation

As a journalist obsessed by how businesses are run, the whole of the North East – and Teesside in particular because of what Teesworks, Wilton International and other development opportunities across the area will bring – is a dream place to work.

Every day the landscape shifts either dramatically or almost imperceptibly, so you have to stay on your toes to record it all and make sense of how it all fits together.

So imagine how it is for someone like David and his team – actually at the centre of every conversation and pulling together those deals that the Business Editors, investors and job-seekers all want to see.

The firm's offices at Newcastle Helix (Image: Press release)

This is the region where it is all happening, like nowhere else in the country and very few places worldwide.

“I think the fast-paced growth of the sector in the region is due to a combination of factors,” says David.

“The right skillsets have been in the North East for a long time. They might not have been applied towards clean energy originally, but they are already there because of such a large, experienced and well-established manufacturing sector. The skills developed in manufacturing are relevant and transferable into the energy sector, including very large-scale infrastructure projects like Dogger Bank.

“I think it’s important to recognise though that the carbon targets the UK is setting mean that the energy sector as a whole is going through a very exciting period of transformation, and the North East is ahead of the curve because it has some of the infrastructure in place already.

“It’s a case of what regions are well serviced, and set up to capitalise on the opportunities that come their way. Our universities play a vital role here. When you have Teesside University, Newcastle, Durham, Sunderland and Northumbria, you've got such a powerful cluster of educational institutions that add so much to our knowledge pool.”

Growing Global

Another key advantage of working with Womble Bond Dickinson is its transatlantic set-up which is becoming more and more valuable as the international focus on the region grows.

“We are seeing existing clients in the US reaching out to us because of what we are doing here in the North East and asking if they can get involved. A lot of these players are larger overseas companies that are looking to enter the UK market because they know there are opportunities around carbon targets and energy security that are driving change forward.

"We have many people in our team who are very well connected with businesses across the region, so we can make introductions which we hope will lead to some exciting opportunities for our clients.

“That’s why we always like to secure relationships from a very early stage, because these opportunities are new and might be relevant to small-scale startups now, but lead to massive potential in the future. With a deep understanding of regional economies and opportunities, we are able to help businesses find their feet quicker and get to where they want to be."

“It has very much been a conscious focus for us as the firm has grown - that we will never lose sight of our roots and the relationship-building that started when we were a smaller firm. A lot of the bigger companies we work with regularly and large transactions that we complete now have come about because the firm knew the businesses involved 10 or 20 years ago.

"For example, we are working with quite a few businesses on early-stage technology that is very focused on energy storage solutions, and a lot of that interest is coming to us from the US, because of WBD's large US practice. We are well positioned to hear from American investors and that is where a significant amount of investment into battery storage projects is coming from.

Womble Bond Dickinson was also one of the first law firms in the UK to announce its own commitment to achieving net zero emissions by 2030

As well as being perfectly positioned to support investment in communities to achieve net zero economies, Womble Bond Dickinson was also one of the first law firms in the UK to announce its own commitment to achieving net zero emissions by 2030 and the firm recently launched its 'Growing Global' campaign.

Growing Global is a collaboration between the firm's UK and US lawyers and covers guidance for business leaders navigating global challenges including supply chains, international, trade and cross-border transactions, and supporting investment in local regions from a global perspective.

The international connection means that the very latest thinking from both sides of the Atlantic can be brought into discussions in Newcastle as much as in Baltimore, Teesside and Houston.

Caring for the region and its businesses

But no matter how much talk there is of transactions and goals, discussions and contracts – for every one of the team at Womble Bond Dickinson, this is a very personal journey to help the sector and the local economy grow.

“Sometimes clients just want us to be their lawyers and that's fine, but I love having the time to talk to clients in-depth and build relationships. No matter what size of business they have, owner entrepreneurs are intelligent and have worked hard on an idea which they're willing to stand behind, which is in itself an impressive achievement.”

David says: “We have to have a deeper understanding of the people and businesses that we work with. This can be challenging but for me it is particularly interesting in the energy space because I don’t think there are many sectors in the North East that have this level of opportunity and variety.

“Even within the energy sector, which some people see as quite specialist, the companies and the people we work with vary dramatically, so it keeps it all incredibly interesting while still being sector-focused. There's never a dull day – and I think clients appreciate when we have taken the time to understand as much as possible about how they operate and how we can help.

“Nobody is ‘just another client' to us - we want to make the most of our expertise here and in the US to realise potential for the businesses themselves and the regions they work in. We’ve worked hard to develop a team of energy experts who are on hand for any company big or small, and I think getting that sort of advice at an early stage can make a big difference.

Newcastle Helix, which houses the firm's Newcastle office, is renowned as a hub of innovation in Europe, and WBD's recent office expansion in Teesside has reinforced its commitment to the region while allowing the firm to have closer connections to key players in the area.

The North East has always been about collaboration, and experience plus innovation equals success.

The more people with the right skills we can bring into that equation, the better we all become.

A snapshot of the WBD portfolio

•  'EnAppSys, a specialist energy data consultant bases in Stockton, was acquired by PE backed Montel Group – a Norwegian buyer, in February 2023
• Longstanding client RES, one of the world’s largest independent renewable energy companies, being advised on its new green hydrogen joint venture, HYRO, with Octopus Energy Generation
• • TAQA (also known as the Industrialisation and Energy Services Company), a portfolio company of the Saudi Arabian Public Investment Fund, on its acquisition of oilfield specialist Tendeka BV from Shell Technology Ventures Fund 1 BV
• Venator Materials plc on a number of transactions, including: Its pre-IPO reorganisation and the UK aspects of its USD454 million IPO on the NYSE
• SeAH wind on a deal to supply turbine foundations for the Hornsea 3 wind farm – the first contract awarded to the newly invested Teesside factory