This month saw Key Capital Partners announce that it had backed the £11 million MBO of Alliance in Partnership (AiP), the specialist educational catering services company. AiP operates more than 170 school catering contracts, feeding over 35,000 pupils per day across central England and West London.
The acquisition highlighted the growing number of deals in the contract catering sector over the last few years in the UK. One of the trends has been the number of facilities management (FM) companies acquiring catering businesses to expand their Total FM (TFM) service offerings to clients in order to increase revenues per contract. This growth in offering integrated services has also occurred within the large catering companies, such as Compass Group and Sodexo, who are increasingly offering wider FM services. Compass Group announced in November 2013 that it would be partnering with Integral as its hard FM services provider to launch its integrated FM offering under the brand name “14forty”.
Other deals done by FM companies for caterers include MITIE’s acquisition of Creativevents, Servest’s acquisition of 7 Day Catering, and Churchill Contract Services acquiring Redcliffe Catering. As companies in the private and public sector continue to outsource more FM services, the businesses taking on these contracts need to show expertise in delivering catering contracts to differentiate themselves from the competition. From a reputational perspective, delivering a good catering service is a key focus for clients and TFM providers who are able to demonstrate significant expertise in this area considerably enhance their chances of winning the larger multi-service contracts.
Growing niches in catering services especially in schools, healthcare, local authorities, and events (in particular sports such as The Olympics and upcoming Rugby World Cup) can enhance the reputation of a TFM provider to increase their prices per contract. The Government announced last year that it would provide free school meals for all children in Reception, Year 1 and Year 2 in state-funded schools from September 2014. They will need to invest £1 billion between 2014 and 2016 as well as providing £150 million in capital funding to improve kitchen and dining facilities in schools – further proof of the potential market growth in this one niche sector.
US-based Arthur J Gallagher announced another acquisition in the UK of the Oval Group, the UK insurance broking, financial planning and healthcare advisory firm for a reported £210 million. The transaction shows the continued consolidation within the insurance broking market and follows on from the acquisitions last September by the group of the Giles Group of Companies and Belmont International.
Capita announced two acquisitions during April: firstly, the acquisition of AMT-SYBEX Group, a provider of software and related services in mobile technology and smart data management to the utilities and transportation sectors. Capita will pay £82 million plus a potential earnout of £23 million if targets are met within the next 12 months. Capita also acquired IT network services provider Updata Infrastructure for a cash consideration of £80 million. Updata provides a range of networking and connectivity services to mainly public sector clients. Capita and Updata have had a strategic alliance in Scotland since October 2011.
Support services provider Parkwood announced that executive chairman Tony Hewitt has launched a takeover bid for the company. Through his acquisition vehicle, he has offered to pay 120p for each share of Parkwood, which values the business at £15.9 million.
Debt management company Fairpoint Group announced the acquisition of Simpson Millar, a provider of legal services with its main lines including family, personal injury, and clinical negligence. Fairpoint has agreed to acquire the company for £9 million payable in cash and shares, with a further earnout consideration of up to £6 million.
Bond International Software, a leading supplier of staffing, HR and payroll software and services, announced the acquisition of Eurowage (trading as FMP Europe) for £8.5 million. FMP Europe is an international HR & payroll company providing fully managed payroll solutions to organisations in approximately 65 countries.
RPS Group announced the acquisition of wastewater consultancy Clear Environmental Consultants for £8.3 million.
Talent International, the Australia-based recruitment services company announced the acquisition of a 50% stake in The 100 Company, an IT recruitment firm, in a bid to boost its UK and European businesses.
Private equity-backed estate agency Romans Group acquired Jacksons Residential’s lettings and sales divisions as part of its growth into Oxfordshire. Bowmark Capital backed the MBO of Romans in September 2013.
Construction firm Esh Group acquired Border Construction to strengthen its position in Cumbria and the Scottish Borders. Terms were undisclosed.
HSS Hire Services announced the acquisition of Scottish generator hire company Apex Generators from its owner Nevis Capital. Private equity firm Nevis Capital acquired Apex in November 2009.
Key Capital Partners announced a £3.3 million investment into temporary staffing company Hallam Medical. Hallam Medical is focused on supplying the NHS and private healthcare providers in the primary care markets.
BGlobal plc announced the sale of its loss-making smart metering solutions division BGlobal Metering to Energy Assets Group for £2.3 million.
Catering firm Aspire Hospitality announced the acquisition of Portfolio Events and London-based event caterer Inn or Out for an undisclosed consideration. The acquisitions will enable Aspire to operate on a national scale.
Listed BPO services provider Genpact announced the acquisition of life sciences regulatory services consultancy Pharmalink Consulting for an undisclosed consideration. The acquisition will complement Genpact’s portfolio of services in the Life Sciences sector adding significant consulting, outsourcing and operations capabilities.
AIM-listed Restore announced the acquisition of records management company Magnum Secure for £4.6 million.
Ogilvie Group announced the acquisition of surveying firm Longdin & Browning for an undisclosed consideration. Longdin & Browning will continue to trade under its own name and will operate within a new division called Ogilvie Geomatics.
Information management company EDM Group announced the acquisition of xit2 for an undisclosed consideration. xit2 offers a range of products to help clients manage the various stages of the mortgage process, enabling lenders to exchange data with third parties such as surveyors, solicitors and estate agents.
Environmental consultancy firms LRS Consultancy and Urban Mines announced a merger of the two businesses. Urban Mines will operate under the LRS Consultancy name.