Fluid Power Services sold to Coventry Group



Our Client – The Vendor

Founded in 1991, Fluid Power Services (“FPS”) is one of Tasmania’s leading providers of hydraulic engineering services and supplies. Based in Launceston, the Business utilises its in-house technical expertise to provide customers with premium products, high-end services, and bespoke fluid-power solutions. Operating for 28+ years, Fluid Power had built a reputation as a ‘one-stop-shop’, ensuring customers’ needs were met with high quality workmanship. As a result of its leading position in the marketplace, the Business was able to secure strategic supplier arrangements with two leading, global hydraulic equipment manufacturers – Rexroth™ and Hydac™ – further strengthening its customer value proposition. Consistent year-on-year performance saw Fluid Power grow organically to over $6 million turnover in FY20 with a team of nine staff members.

Having built the Business since inception, in 2019 Fluid Power’s two directors sought to exit and begin their retirement by way of sale to a third party – with the objective of finding a new owner committed to the ongoing operation of the Business. When they engaged Johnsons to undertake a national divestment campaign targeting related trade buyers, it was with a clear understanding of the challenges posed by FPS’s regional location and its high dependence on the owners in day-to-day operations. Johnsons was careful to set realistic expectations about the potential impact these factors could have on the sales process.

The National Sales Strategy

For prospective trade buyers, this acquisition represented a solid bolt-on opportunity. At the time of sale, Tasmania’s economic growth was outpacing that of Australia as a whole, and many of the industry sectors represented by Fluid Powers customers were projected to experience ongoing solid growth. In that light, a new owner could expect continuing demand for the Business’s services and would also have further growth opportunities to explore.

Johnsons Corporate’s custom research & marketing focused on Australian providers of hydraulic services & supplies as primary targets. Then, to maximise the pool of potential buyers, secondary research made a comprehensive sweep of related sectors. Johnsons ran a proactive national marketing campaign that uncovered 25 qualified, interested parties. As anticipated, there followed a prolonged period of negotiations which were further complicated by the Covid-19 pandemic. Johnsons remained committed to finding a buyer, eventually securing Offer & Acceptance after a second round of marketing post the initial Covid lockdowns.

(Read more about how using a Specialised Mid-Market Business Broker Approach to selling your business could get you a better outcome – just like our client).

The Strategic Trade Buyer

ASX-listed Coventry Group is a distributor of industrial products and services operating throughout ANZ. Its two divisions, Fluid Systems and Trade Distribution, operate a number of independent subsidiary businesses. This acquisition aligned with Coventry’s strategic turnaround program, which included an expansion of its presence in Tasmania.

What Our Client Had to Say

"As they say timing is everything, and Johnsons stayed with us every step of the way to complete the transaction. In the end it may have taken us longer than we first thought, but both of us are extremely happy with the result. We can’t recommend Johnsons highly enough. Coventry Group is a great fit with Fluid Power, and we couldn’t have gotten here without them."

Richard Lawson & Rodney Callahan - Directors - Fluid Power Services