The housing market in the UK (other than parts of London) has been stagnant since the financial crisis, but the recovery is now well underway thanks in part to the Government’s Help to Buy scheme launched in March 2012 and the Funding for Lending scheme launched in July 2012.
In London, the market continues to defy the critics and has consistently grown over the last few years, although for a period growth was concentrated in specific prime areas.
The recovery in the housing market this year has led to a clear confidence in the capital markets and increased deal activity. Crest Nicholson, an upmarket housebuilder focused on the South of England, launched a successful IPO in February raising £225 million. Crest Nicholson was a high profile victim of the financial crisis when it was taken over by its lenders in 2009 – its return to the stock market allowed it to pay off debts owed to its shareholders including Varde Partners and Deutsche Bank.
Countrywide plc, the UK’s largest estate agency owned by private equity firm Oaktree Capital, completed its IPO to raise approximately £200 million the following month. Countrywide operates 46 local high street brands such as Bairstow Eves, Bridgfords and Hamptons International.
Foxtons Group plc, the London-based estate agency owned by BC Partners, also announced plans in August for an IPO and shares began trading on 20 September. The shares were priced at 230 pence each, valuing the company at £649 million. The IPO is expected to raise gross proceeds of approximately £390 million, comprising a primary component of £55 million and secondary sales of £335 million. Secondary sales will consist of a partial sell-down by BC Partners, directors and employees of the group.
Zoopla, the online property website and direct competitor to London Stock Exchange listed Rightmove plc, is also rumoured to be planning an IPO having hired Credit Suisse this month to “explore further strategic opportunities”.
The estate agency market has also seen numerous deals in 2013 as another indicator of confidence in the housing market. In 2013 there have been over 20 transactions in the estate agency sector. One of the most high profile deals was Bowmark Capital backing an MBO of Romans Group, the Berkshire-based estate agent, valuing the company at a reported £50 million. Bowmark plans to provide capital to expand Romans both organically and through acquisitions. Another investor, Lomond Capital, was formed in 2010 to acquire, consolidate and grow in the sector and has already completed 9 acquisitions since its formation.
With UK housing demand outstripping supply, we anticipate further deals across the sector.
Zoopla Property Group Ltd announced the acquisition of Trinity Mirror Digital Property Ltd, the owner of SmartNewHomes.co.uk, Email4Property.co.uk, HomesOverseas.co.uk and Zoomf.com from Trinity Mirror plc for £3.3 million.
Carey Group plc, an independently owned construction company, acquired The BDL Group plc, the Uxbridge-based specialist building contractor, for an undisclosed consideration.
Assurant Inc., the New York-based provider of specialized insurance products and related services, announced the acquisition of Lifestyle Services Group Ltd, a mobile phone insurance provider in the UK, for up to £107 million in cash from Phones 4u Finance plc. The acquisition of Lifestyle Services Group will strengthen and expand Assurant’s global mobile presence.
LDC backed the MBO of Equiom Ltd, the Isle of Man-based provider of fiduciary and administration services.
Segro plc announced that it acquired the remaining 50% stake in its Belgian logistics property joint venture with KBC Real Estate for a consideration of £28.1 million. The joint venture with KBC consisted of two logistics assets; one at Bornem and Rumst. The acquisition follows Segro’s announcement in June 2013 that it is forming a €1 billion logistics property joint venture in Continental Europe to be known as Segro European Logistics Partnership. The Belgian joint venture’s assets will be injected into this new joint venture.
Vp plc acquired Mr Cropper Ltd, a rental provider of pile cropping machines to the UK groundworks and construction sectors for £4.6 million. Mr Cropper is the market leader in the rental of pile cropping machines to the UK groundworks and construction sectors. Operating across the whole of the UK with two locations in the South East and Midlands, Mr Cropper has been established for 13 years.
US-based Arthur J Gallagher & Company announced the acquisition of the Giles Group of Companies, an insurance brokerage for £233 million in cash at the beginning of September. The acquisition will provide an exit for Charterhouse Capital Partners. Less than two weeks later, Arthur J Gallagher announced a second acquisition – Belmont International, a risk management advisor and insurance broker that provides both retail insurance and employee benefits products and services for their commercial and personal lines U.K. clients.
Bloomsbury Publishing plc announced the acquisition of Hart Publishing Ltd, the Oxford-based legal publisher for a consideration of up to a maximum £7 million. The acquisition will increase Bloomsbury’s presence in the academic and professional market
France-based TIC services firm SGS announced the acquisition of MIS Environmental Ltd and MIS Testing Ltd, both companies based in Consett, UK. MIS Environmental offers services in in asbestos, environmental and health and safety testing and consultancy services. MIS Testing provides mechanical and material testing services in the UK.
Hydrodec Group plc announced the acquisition of the business and assets of OSS Group Ltd from the administrators for a purchase price of £4.65 million in cash. OSS Group is the UK’s largest collector, consolidator and processor of used lubricant oil and seller of processed fuel oil.
Netherlands-based Nijhuis Water Technology announced the acquisition of H2OK Water and Energy, the Cornwall-based specialist environmental consultancy and project management service specialising in the waste water and sewage sectors.
MJ Hudson LLP announced that it will merge with St Helier, UK-based law firm VerrasLaw. The merged firm, which will be known as MJ Hudson, will provide asset managers and investors with legal services for funds, investment, corporate finance and M&A work in London and the Channel Islands.
Shakespeares Legal LLP announced a deal to acquire Newsome Vaughan LLP, the Coventry-based law firm, and Marrons Consultancies Ltd, a law firm based in Leicester.
Wealth management firm Towry Holdings Ltd announced the acquisition of Bluefin Personal Consulting Ltd, a division of financial planning services firm Bluefin, owned by French insurance company Axa. The deal is expected to complete by the end of the year.
Spie SA announced the acquisition of Electricity Network Solutions Ltd, a provider of overhead line survey, design, build and refurbishment services in the UK.
ParcelHero.com Ltd acquired Fast Lane Couriers Ltd (trading as Fast Lane International), a Brentford-based online parcel delivery courier firm. The acquisition of Fast Lane strengthens and expands ParcelHero’s service offering, offering a range of services from all of the UK’s leading carriers, across the UK and international markets.