Sovereign Capital, the UK private equity buy & build specialist has announced the acquisition of The Lord Group Limited by its portfolio company Kinetics Group. Yorkshire Bank are providing acquisition funding and ongoing working capital to Kinetics, which sees the bank now back four of out the five acquisitions Kinetics have made.
The Lord Group is based in Rochdale, and is a well established fabric maintenance provider to the Greater Manchester social housing sector. Kinetics will now extend its existing fabric maintenance business in the North West, an area benefiting from significant local government spend to improve the region’s social housing stock.
Combined with Merseyside-based Camerons, Kinetics now services a broader spread of local authority framework agreements in the North West and The Lord Group has diversified its customer base through the introduction of education and NHS contracts.
As a result of Sovereign’s buy & build strategy, Kinetics has grown from a £32 million revenue business in 2006 to a company with annual sales in excess of £100 million today and now directly employs in excess of 1,200 staff.
The directors of The Lord Group, Janet and Andrew Lord, will remain in the business going forward and will assist with the integration into Kinetics and the development of existing customer relationships.
Chris Cheshire, group managing director at Kinetics, said: “The acquisition of The Lord Group complements Kinetics’ existing fabric maintenance business, extends the geographic reach in the North West and brings some of the region’s key framework agreement contracts to the Group. We look forward to developing the combined fabric maintenance business to take advantage of our newfound scale and to maximise cross-selling opportunities into our gas maintenance and MOD divisions.”
Ian Mansell, director with Yorkshire Bank added: “Yorkshire Bank has supported four of the five acquisitions Kinetics has made. This market is growing in response to government initiatives and Sovereign’s buy & build specialism together with their continuing investment in Kinetics is proving to be very successful.”
Simon Hitchcock, director at Sovereign, said: “Achieving critical mass in fabric maintenance in the North West is an important step for Kinetics. The combined scale of The Lord Group and Camerons will enable Kinetics to tender for other, larger contracts in a region which is witnessing substantial local authority expenditure on improving the UK’s third largest pool of social housing stock. This acquisition, the fifth for the overall Group, clearly demonstrates the value-add of Sovereign’s buy & build strategy.”
Yorkshire Bank were advised by Andrew Madden of HBJ Gateley Wareing. Sovereign were advised by Jim Laffery and Richard Wilkey of DLA Piper in Birmingham.