Business Services sector comment – facilities management – July 2017

Cross-border M&A activity in the facilities management sector continues to be dominated by French buyers

Over the last 4 years, the facilities management sector has experienced a rising level of cross-border deals as international buyers either look to acquire their platform or build further presence in the UK. In 2013, approximately 24% of UK targets were acquired by foreign companies. This number has now risen to 36% with growing interest from the US, but primarily French headquartered companies who accounted for 18% of all deals in the last twelve months.

The trend was further illustrated in June as Elis SA announced the acquisition of Berendsen plc. The £2.17bn deal is transformational for Elis who will become a pan-European leader in the linen & workwear rental, laundry services and hygiene market with combined revenues of €3.3bn. Further, the timing of the deal is shrewd, with Elis looking to benefit from Berendsen subdued share price following profit warnings in March and October last year. The deal reflects a 44% premium to Berendsen’s 17 May closing price and a transaction multiple of 7.3x EV/EBITDA 2017e.

In the same month, EDF Energy Services, a joint venture between EDF Energy and Dalkia, agreed to purchase Imtech UK and Ireland from Endless LLP, a deal advised on by Clearwater International. The acquisition will be critical for EDF Energy Services in bringing technical capability to support the full life cycle of an asset, from design through to maintenance, and also helps to further the group’s international expansion strategy.

If you would like to discuss any of the above content or hear further thoughts on the sector then please contact either Mark Maunsell or Marcus Archer. Both Mark and Marcus recently presented at the Facilities Show in London, see the presentation here.