This website uses cookies primarily for visitor analytics. Certain pages will ask you to fill in contact details to receive additional information. On these pages you have the option of having the site log your details for future visits. Indicating you want the site to remember your details will place a cookie on your device. To view our full cookie policy, please click here. You can also view it at any time by going to our Contact Us page.

M&A activity finds it hard

28 March 2012

In 2011, the number of mergers and acquisitions involving the UK facilities management sector has reached the highest count since 2008 and the credit crunch, according to research analysed by Grant Thornton. Deal numbers are expected to remain high as some firms pursue scale while others seek new service lines.

"M&A in facilities management continues to be dominated by the hard FM sector, which includes Maintenance and Fit-out as well as Mechanical and engineering. Hard FM accounted for about two thirds of FM deals in 2011," commented David Ascott, corporate finance partner at Grant Thornton UK LLP.

Examples of hard FM deals included the sale of divisions of Kinetics Group to SCO Renewable Energy, the acquisitions of Linbrook Services by Wates Group and the sale of certain house building assets by Rok Ltd.

"Meanwhile, low margin FM providers were pursuing scale to protect earnings in a tough economic environment. These included cleaning, catering and security guard services. Facilities management businesses across the board increasingly seek to bolt on higher margin niche capabilities to offer even more comprehensive bundles of services."

UK facilities management assets were the target of 101 announced M&A transactions with a total value of £656 million in 2011*. That represents a 13% increase in the number of deals compared to a year earlier, even though the total value dropped by 20% (2010: 89 deals valued at £816 million).

Only one 2011 deal - the £306 million acquisition of EAGA plc by Carillion - had a reported value in excess of £100 million. By comparison, British facilities management assets had been the target of 110 M&A deals valued at £1.2 billion in 2008. The 2011 figures include 19 takeovers backed by private equity sponsors, while 11 acquisitions were made by foreign bidders.

"We are seeing signs that the M&A market in facilities management will remain highly dynamic in 2012 and will continue to offer up strong numbers of smaller deals. Beyond the hard FM space, an area that is attracting increasing interest is the provision of data centre services. As the use of cloud technology grows and businesses look to move their data away from internal servers, FM players in the data services area will surely attract more attention. Consultancy based FM businesses are also likely to generate increasing interest among potential buyers, attracted by the higher margins and high barriers to entry these businesses can offer," concluded Ascott.

Contact Details and Archive...

Print this page | E-mail this page


View more articles
Article image

Why the Law Says You Need a Nappy Bin Disposal Service

At home, parents are used to disposing of their babies’ used nappies the same way they do any other domestic waste - bagging it up and sticking it in the r...
Article image

Major role of outsourced services in saving Whaley Bridge homes

Last week saw prolonged national media coverage of the plight of residents of Whaley Bridge, Derbyshire, due to the Toddbrook Reservoir becoming unsafe....
Article image

Concerns raised over growth of facial recognition technology use

Data protection watchdog the Information Commissioner's Office (ICO) has said it is "deeply concerned" over the growing use of facial recognition...

Benchmarking maintenance

BSRIA has just published this year's operation and maintenance benchmarking report as a guide for building operators to evaluate their performance against ...
Article image

Adhesive free, hassle free office installation using Forbo's Modul'up

Offering the unique ability to reduce downtime while providing cost and time savings, Forbo Flooring Systems’ innovative adhesive-free sheet vinyl collecti...
Article image

Create a new workspace with a free fit-out guide

A workspace interiors company has launched a free fit-out guide to help businesses reduce the time, money and stress of refurbishing or relocating their wo...