This month saw The Innovation Group announce the acquisition of LAS Claims Management (LAS) from Gresham Private Equity. LAS is a provider of outsourced claims management services across a range of property-related perils including storm, burst pipes, flood, fire, theft and accidental damage. The deal was valued at £35 million. The Innovation Group also announced in its interim management statement on the same day that it had acquired Crash-worth, which manages a nationwide network of motor accident repair centres, for £11.75 million in January 2014. In April 2013 Innovation Group also announced the acquisition of Gemini Vehicle Solutions, a motor claims and accident management support services firm.
These acquisitions highlight the growing M&A trend in the BPO claims management sector. Another market consolidator is Quindell plc, which has been extremely acquisitive over the last three years acquiring over 20 companies. Its acquisitions have ranged from accident management to legal services, medical reporting and software developers in its bid to be a leading provider of software, consultancy and technology enabled outsourcing services to the insurance, telecommunications and other related markets.
The appetite for foreign buyers entering the sector was recently highlighted with US-based Hertz, the world’s largest general use car rental firm, acquiring CCL Vehicle Rentals, a Dorset-based accident management service provider to the credit hire market, in June 2013.
Private equity houses have also been acquisitive in the sector, with Sovereign Capital’s acquisition of Crewe-based Kindertons in October 2013. Kindertons, which provides outsourced accident management services for motor insurers and insurance brokers together with claims management services for drivers who have been involved in a road traffic accident, will form the basis of a buy and build strategy. In December 2013, it announced its first acquisition, a non-fault motorcycle accident claims management and credit hire specialist, Plantec.
The insurance industry over the last few years has come under pressure from increased claims and low margins on products such as motor insurance, which has led to many firms outsourcing back office functions, including claims management to BPO providers to improve the quality and speed of processing as well as to reduce their costs.
We see more deals continuing in the sector as BPO services become more sophisticated and the attractions of a fully integrated approach drive further processes to be outsourced.
Private equity firm ECI announced the sale of document printing, copying and scanning solutions provider M2 Digital to The Rigby Group, for an undisclosed consideration. ECI originally invested £12 million into M2 in 2006. M2 Digital will be merged with SCC, the IT services division of The Rigby Group.
Listed estate agent Countrywide announced the acquisition of Personal Homefinders, a rental estate agency with branches based in Winchester, Chandler’s Ford and Eastleigh.
Colliers International has announced the acquisition of retail property specialist Briant Champion Long. Founded in 1987, Briant Champion Long provides agency, investment and lease advisory consultancy to a wide range of retail clients, landlords and investors.
United Parcel Service (UPS) announced the acquisition of Polar Speed Distribution, a firm that specialises in temperature controlled logistics services for the pharmaceuticals sector. The deal is part of UPS’s healthcare strategy to strengthen its European healthcare logistics services.
Private equity investor Duke Street announced the sale of its UK debt purchasing firm Marlin Financial Group to Cabot Credit Management (CCM), in a deal valuing the company at £295 million. Duke Street originally acquired a majority stake in Marlin for £12.5 million in April 2010 and the sale has generated a 3x money multiple and an IRR 42% for Duke Street. CCM is backed by US private equity firm JC Flowers, which acquired the company from AnaCap Financial Partners in May 2013 for £800 million.
Recruitment process outsourcing firm Alexander Mann announced its first acquisition since its takeover by US private equity firm New Mountain Capital in October last year for £260 million. Alexander Mann agreed to acquire Talent Collective, a management consultancy specialising in talent acquisition with offices in 12 countries around the world.
City law firm Field Fisher Waterhouse announced a merger with Manchester-based commercial law firm Heatons.
Estate agent Thornley Groves announced the acquisition of the rental business of Allison & Co, bringing the number of properties under its management to 2,300. The transaction is the first since Thornley Groves was acquired by Lomond Capital in September last year.
Accountancy firm Baldwins continued its expansion with the acquisition of accounting firm Griffith & Griffith. The deal is the 17th acquisition done by Baldwins.
Portfolio Recovery Associates, the NASDAQ-listed provider of debt recovery services for financial institutions and government agencies, acquired certain operating assets from Pamplona Capital Management (PCM). The assets acquired include PCM’s IVA Master Servicing Platform and other operating assets associated with PCM’s IVA business. Portfolio Recovery Associates entered the UK market with the acquisition of Kilmarnock-based debt collection company Mackenzie Hall in January 2012.
Countryside Properties acquired Millgate Developments, a Berkshire-based premium house builder, for an undisclosed consideration as part of its growth strategy. Countryside Properties was acquired by distressed debt investor Oaktree Capital in February 2013. Lloyds Banking Group took control of Countryside Properties in 2009 as part of a refinancing deal. As part of the transaction when Oaktree acquired a majority stake in the firm, Lloyds Bank Commercial Banking provided a new 5 year committed debt facility worth £165 million.
Interserve announced an agreement to acquire the facilities service business (Initial Facilities) from Rentokil Initial for a cash consideration of £250 million. Initial Facilities has operations in the UK, Ireland and Spain and employs approximately 25,000 people. Its range of facilities services includes specialist single services, including cleaning, catering, security, mechanical and electrical building maintenance, energy management and statutory compliance, to fully integrated Total Facilities Management. The transaction will make Interserve one of the top three FM companies by revenues.
Bunzl continued its expansion abroad with the announcement that it had acquired business in Germany and Czech Republic. Bunzl acquired Bäumer Betriebshygiene Vertriebsgesellschaft mbH based in Düsseldorf, Germany. Bäumer is a provider of cleaning and hygiene and healthcare supplies to end users in various market. Bunzl has also purchased Oskar Plast sro based in Prague. Oskar sells a variety of disposable packaging products to customers throughout the Czech Republic including retail chains, food processors and other distributors.
OCS Group announced an undisclosed investment in Agents4RM, a global professional services business for the facilities management and built environment sector. The investment will enable Agents4RM to take its consultancy proposition to OCS customers around the world and enable Agents4RM to acquire further consultancy businesses in different geographies.