Another month and another star of the sector collapses, just 8 weeks after the collapse of Connaught, construction and maintenance provider Rok plc sadly fell into the hands of administrators this month.
Once a City favourite, the self styled “nation’s local builder” started to show cracks a couple of years ago when it hit the stock market with an unexpected profit warning. In September it cleared its former finance director Ashley Martin after an investigation failed to uncover any evidence of malpractice related to problems at its plumbing, heating and electrical unit. The company later blamed problems on the scaling back of sub-contracting work from the private housing sector and a combination of weak operational, commercial and financial controls within that part of the business. Administrator, PwC has so far only been able to raise £7m from Balfour Beatty for the company’s affordable housing and general construction divisions despite expressions of interest from many of the big contractors, and whilst PwC are pledging to pay staff, it’s the trade contractors and suppliers that will suffer as they face millions in unpaid debts.
Elsewhere in the construction services market things looked a little rosier with Taylor Wimpey securing a £950m revised credit facility allowing it to invest in new land again, and shares in Interserve, the support services group heavily exposed to the UK public sector, rebounded 8 per cent to 198p after an improvement in financial performance. Serco also appears to be back on track following 3 weeks of a declining share price. The public sector contractor, who had a recent spat with the government after sending letters to its suppliers asking for a cash rebate, has just announced a £2.3bn rise in orders since July this year and is in line to reach sales of more than £5bn by the end of the year. Despite this good fortune, however, the company is still on a cost saving mission and has confirmed savings will be made through “scope changes and cost efficiencies.”
There have been continued rumours regarding a possible £50m float for Pimlico Plumbers, the UK’s largest independent plumbing firm. Charlie Mullins, its founder, had been in talks earlier in the year to sell a significant stake to US born millionaire, Jim Zockoll, who founded British drain cleaning business Dyno-Rod, earlier in the year but the pair fell out over strategy. Follow up stories however suggest Charlie isn’t quite ready to give up the reigns on the plumbing and maintenance business he has built up over 30 years. If however the company is to expand outside the M25, investment of some sort is inevitable. Could this come in the form of Private Equity? My guess is they’d be falling over themselves to get hold of this growing business and its celebrity client list.
Private Equity interest in niche recruitment continued this month with the acquisition of medical recruiter Pulse Staffing by US investor, Blackstone Group. The deal is in line with Blackstone’s plans to consolidate the healthcare staffing sector to create a market leader in providing health and social care professionals. Pulse follows the recent acquisition by Blackstone of ITC from Inflexion.
Private Equity are also said to be queuing up to buy the staffing agency of the National Health Service, NHS Professionals. The company which provides medical professionals and admin staff to public sector health trusts was set up by the former Labour government to stop the NHS being overcharged by private agencies. The sale is part of the government’s asset disposal programme – and it will not be the last time the government look in the cupboard to see what they have got left to sell.
TTi Global, a technical training and staffing company, has acquired Lorien Customer Focus, a global market research and customer satisfaction firm for an undisclosed sum. Family owned TTi Global, based in the US is a provider of technical training, recruitment and operations outsourcing primarily to the automotive industry. Lorien has 50 employees across 26 countries and also serves numerous automotive companies helping to boost sales through market research and customer service training programs. Lorien will continue to operate with the same name and remain in the UK where TTi Global already has an office. Projected annual revenue for the combined companies is $73m.
Leading staffing and recruitment software developer, VCG, is acquired by Bond International Software for an undisclosed sum. Bond International Software is a leading supplier of fully configurable staffing and recruitment software and supplies the majority of the global recruitment players. The merger strengthens Bond’s position as the largest global provider of staffing and recruitment software and allows Bond to secure an important additional portion of the US market.
Balfour Beatty continues its global expansion with the acquisition of Canadian professional services firm, Halsall Group, for £33m. Employee owned Halsall based in Toronto provides design and engineering services to the building market with particular emphasis on sustainable design and restoration. It also provides structural engineering services to clients in the transportation market. Halsall has seven offices in Canada and over 300 staff, generating turnover of £26m in 2009. The acquisition extends the geographic reach of Parsons Brinckerhoff which Balfour acquired last year.
AEA Technology Group completes its acquisition of American environmental consulting firm Eastern Research Group, its second acquisition in the US, for £52.5m. The acquisition of ERG furthers AEA’s strategy of building a group that can provide high level consultancy services to the US federal government sector and then extend those services into the US and UK private sectors. This is the group’s second US acquisition following the purchase of Project Performance Corporation in 2008.
Educational and office equipment products supplier, Librex Educational, has been acquired by JB Holdings for a six figure sum. Librex supplies general office, library, educational and display equipment to a broad range of businesses, schools, hospitals and local councils. The takeover deal was supported with facilities provided by the Yorkshire Bank’s Nottingham financial solutions centre under its Investing for Growth banner.
Catering and support services provider Compass Group plc continues it’s buying spree with the acquisition of Danish food services company IDA Services for £17m. IDA, the fourth business to be bought by Compass in the last five months is an established operator that will complement Compass’ existing operations.
Autogrill sells its UK subsidiary, Alpha Flight Group, to Dubai based airport services company, Dnata for £100m. Alpha is a leading international in-flight catering business with a turnover of £360m and employs over 5,800 staff in 11 countries. It produces over 120,000 meals per day at 58 airports globally. The acquisition will increase Dnata’s international portfolio significantly, with the company’s ground handling and catering operations now set to operate in 70 airports in 17 countries.