Accountancy and business advisor firm BDO LLP has guided the sale of two FM businesses, which it says indicates an increase in merger and acquisition activity in the market.
Its team, led by the head of facilities sector M&A Satvir Bungar, acted as adviser to the shareholders of B38 Group Holdings. The nationwide provider of critical, compliance-led FM services, which has regional offices in Birmingham and Derby, was recently sold to Leicester-based Bellrock, the technology-enabled compliance and risk management company.
B38 Group Holdings provides a diversified offering through a mix of hard and soft FM services across the UK with a strong presence in Northern England and the Midlands, working in the food, retail and student accommodation markets.
Bungar said: “B38 is an exciting and fast-growing privately owned business, which is a real success story during the pandemic. This deal represents an excellent partnership with a company of Bellrock’s calibre, thanks to the potential for synergies across a range of service lines. Given B38’s strong market credentials, this represents an exciting deal in the FM sector.”
BDO’s team also acted for shareholders of Prolectric Services – an off-grid solar energy solutions company. The privately owned company has been acquired by UK-listed plc, Hill & Smith Holdings – a West Midlands-based international group providing sustainable infrastructure and safe transport solutions. The deal is worth an initial £12.5 million, which could rise up to £18.2 million based on financial performance targets, said BDO.
Prolectric has grown rapidly as a result of the government-driven transition from fossil fuels to zero-carbon technology. Projects include the Hinkley and Sellafield nuclear sites, as well as the NHS Nightingale Hospitals.
Bungar explained: “The company has attracted a lot of interest from both private equity investors and trade buyers, given its fast-growing dynamic and position as market leader in solar energy – an area of the market that will continue to gain significant traction and offer long-term growth potential as the ‘green agenda’ spreads throughout the economy. Prolectric’s product portfolio is a true alternative to traditional technology, with significant advantages to the end user in terms of cost, labour and maintenance. The tie-up with Hill & Smith represents an excellent fit for Prolectric.”
Expanding on the revival he perceives in the industry, Bungar added: “The FM sector – both in the Midlands and the UK – is rich with innovative companies, such as B38, which are pushing the boundaries when it comes to service offering. Despite the economic backdrop, this makes them an extremely attractive proposition to larger corporates looking to expand their footprint in localised and global markets.
“The FM market, like many, has been compressed as a result of Covid-19, but it is pleasing to see how it has grown in prominence due to the essential frontline role it has played during the pandemic. As the economy starts to open up, we expect to see an increase in the number of trade and private equity deals being completed as buyer confidence returns. We anticipate this will gain significant traction as the UK follows the government’s roadmap to recovery over the coming months.”
Image credit | BDO LLP