Integration is not a new concept in business but has recently developed into new dimensions. During the last 2 decades many industry pundits have recommended specialization and many business leaders have outsourced or sold non core activities and to divest assets.
However, in recent years the push for integration has found new adherents. In some industries, the benefits of outsourcing outpace the risks however rowing against the tide can prove to be a good decision. The best recent example is Apple Inc that under the leadership of Steve Jobs moved away from the trend in the technology industry for outsourcing to integrate and control most of the supply chain and components of its products from software to design to manufacturing and costumer interaction.
Can a similar integration model be successful in the support services sectors? In facilities management for example, developments in the last 5 years have shown that it can be possible to integrate successfully under the same provider both the management and servicing of a portfolio of commercial or residential properties.
During the last couple of years we have noticed that traditional residential and commercial property managers are looking to control in-house not only customer service, and accounting functions but also cleaning, security, document management and printing; original equipment manufacturers are expanding to property management and FM providers are acquiring property management companies. For many years, companies on each individual industry would be looking to be market leaders on its own industry but these developments reveal the origination of a total Building Services Industry.
Property managers such as Capita Symmonds, a Capita Plc company, that manages over 100 million sqft commercial property is successfully cross-selling BPO services to its customer base including printing, document management but also soft and hard FM services. Manufacturers such as Johnson Controls, the industrial group is currently providing real estate services for Fortune 100 clients such as Motorola under its Johnson Controls Global WorkPlace Solutions brand. Traditional FM providers such as Aramark, the USA based company that specializes in catering, acquired the FM and property management businesses of Veris Plc in 2009. UGL Limited, a global leader in outsourced engineering, asset management and property services acquired DTZ, a market leader in property management in the USA. These are only a few examples of the on-going trend for integration in the Building Services industry that will surely lead to more M&A activity over the forthcoming years.
Integration will continue to originate discussion among industry analysts and at the Board level but trend for integrations looks unstoppable.
Smart Computer Holdings Ltd, the Hertfordshire based workforce management solutions company has been acquired by Kronos Inc, the multi-national workforce management software and services company for an undisclosed consideration. The acquisition reinforces Kronos’ global expansion strategy and gives the group access to SMART’s National Health Service (NHS) customers, establishing itself as a leader in the UK healthcare market.
United Business Media Ltd (UBM), the listed UK based, global live media and B2B communications, marketing services and data provider has acquired Negocios nos Trilhos, a Brazil based, cargo and public rail transport tradeshow, from Grupo Revista Ferroviária for an undisclosed consideration. The transaction was made on behalf of UBM Live and complements its Intermodal transport exhibition in Brazil and it overlaps with UBM Global Trade’s US rail industry products.
OCS Group Ltd, the UK based specialist in facilities management providing, security, catering, cleaning, horticulture, waste management, washroom hygiene and pest control services has acquired a 51% stake in Absotherm Facility Management Services Pvt Ltd, an Indian based company providing engineering (mechanical & electrical), water management, safety and energy audits and non-conventional energy solutions for £14.6m. The investment is in line with the group’s vision of increasing its Asian axis and being recognised in the Indian market as a total facility management provider.
Reed Business Information Ltd, the UK based Business to Business Media publishing company has sold Totaljobs Group Ltd, a jobsite operator to StepStone Deutschland AG, the Germany based online recruitment company for a consideration worth £108m. The acquisition allows StepStone to further expand its market share over competitors and positions the company as one of the leading European online job portals.
Data Explorers Ltd, a UK based company engaged in the provision of securities lending, data tracking, short selling and institutional fund activity across all global market sectors has been acquired by Markit Group Ltd, a leading, global financial information services company for an undisclosed consideration. Markit acquired the company from Bowmark Capital LLP, a South East based private equity firm. The acquisition allows Markit to extend its existing service offerings in data, research and analytics for the equity markets and complements fixed income services.
Island Shipbrokers Pte Ltd, the Singapore based, ship brokering company has been acquired by ICAP Shipping Ltd, an UK based company and a subsidiary of ICAP Plc, ICAP Shipping Ltd acquired Island Shipbrokers Pte Ltd from two private Singapore investors and Mystic Enterprises Ltd, for an undisclosed consideration. The acquisition complements ICAP’s Shipping existing London and Shanghai operations and strengthens its growth in the Asia region.
No1 Currency Ltd, the Scotland based, Corporate Payments and Bureau de Change specialist has been acquired by FEXCO Ltd, an Ireland based, financial services company providing Merchant, Business and Consumer Services, for an undisclosed consideration. FECXO acquired the company from Reliance Money Express Limited, an India based foreign exchange services business. The acquisition ‘provides FEXCO with an enhanced national footprint, a strong platform for continued growth in the UK and a material income stream.
Ochre House Ltd, the UK based recruitment process outsourcing (RPO) and strategic talent Management Company has acquired TAAHEED, a UAE based recruitment company specialising in project management, managed services and RPO solutions for an undisclosed consideration. Ochre House Ltd also acquired Carmichael Fisher, an Australia based executive search and selection services company for an undisclosed sum. The acquisition allows the group to expand its global RPO capability in the Middle East and North Africa.
Incite Marketing Planning Ltd, the UK based consulting firm has been acquired by St. Ives Plc, the marketing services, printed products and display solutions provider for £11.4m. Incite was acquired from three private investors and recorded £1.7m EBITDA for the financial year ending February 2011. The acquisition is part of St Ives’s strategy to create a complementary range of digital and marketing services that will enable the Group to add further value to existing and new clients.
Bridgehead International Ltd, a Midlands based, healthcare consultancy firm has been acquired by GfK SE, a leading Germany based, market research company for an undisclosed consideration. Bridgehead International reported revenues of £10.1m in 2011. The acquisition is in line with GfK’s strategy to invest in and expand its global health care business. Following the acquisition, Bridgehead International will be renamed as GfK Bridgehead and all 60 employees including management will continue to work for the company.
Fairbrother Lenz Eley Holdings Ltd (FLE Holdings Ltd), the UK based media consulting business has been acquired by Ebiquity Plc, the business critical data, analysis and consultancy services provider. FLE has been acquired for an initial consideration of £5m with a maximum total consideration of up to £11m, depending on the performance of the FLE business in the year ending 31 December 2012. The acquisition is in line with Ebiquity’s strategy to develop its offerings and geographic reach. The acquisition will funded by a new £30m debt facility with Bank of Ireland and Barclays.
Appleyards, the UK based multidiscipline professional consultancy services company has been acquired by Artelia UK, for an undisclosed consideration. Artelia UK is a wholly owned subsidiary of Groupe Artelia, the France based, engineering, consulting and project management firm. Appleyards reported revenues of £9.9m for the financial year ending 31st March 2011. The acquisition allows the Artelia to further develop its UK presence.
Mortgage Talk Ltd, the South Yorkshire based mortgage Services Company has been acquired by Mortgage Advice Bureau Ltd (MAB), an independent mortgage and protection broker for an undisclosed consideration. The company was acquired from an UK based private investor. The acquisition provides MAB with greater diversification, increased scale, a platform for expansion and greater profitability. The MAB group will now have more than 500 advisors with mortgage applications of up to £4.5bn.
EMU Ltd, a UK-based marine consultancy, survey and laboratory testing specialist has been acquired by Fugro NV, a Netherlands based geotechnical, survey and geoscience provider for an undisclosed consideration. EMU reported annual revenues of over EUR 20 million and currently employees around 150 people. The acquisition supports Fugro’s strategy to provide its clients with fully-integrated solutions. EMU’s specialist services will further enhance Fugro’s capability to support clients’ projects from concept to completion
IMS Research, an East Midlands based supplier of market research and consultancy for the global electronics industry has been acquired by IHS Inc., a global provider of critical technical information, related decision-support tools and strategic and operational services for a consideration of approximately £28.7m. The acquisition helps IHS to expand its product and service range in the technology, media and telecommunications (TMT) value chain, positioning the group to deliver a more robust product offering to its customers in the global technology market.