Deal sees Southerns partner property company
SOUTHERNS, THE Leeds-based furniture, fittings and equipment firm, is to join forces with property services firm Styles & Wood Group in a deal that values the latter at £42.5m.
Southerns has grown quickly over the last two years following an investment by Steve Parkin’s venture capital vehicle, Central Square Holdings Limited (CSHL).
The board of CSHL and the independent directors of Styles & Wood have reached agreement on the terms of a recommended cash offer, under which CSHL will acquire Styles & Wood.
The offer is conditional upon the approval of Styles & Wood’s shareholders. Irrevocable undertakings have already been secured from the holders of 61 per cent of the share capital of Styles & Wood.
Southerns is a fixtures, fittings and equipment specialist that has worked with a range of blue chip clients including Carillion, Bunzl and a number of top end universities including Leeds. Its customers include clients in the healthcare, education and commercial sectors.
The business has achieved rapid organic growth following an investment by CSHL in 2015, supplemented by acquisitions.
Southerns is headed by Andrew Kendall-Jones, who is the largest shareholder in the firm. In the year to June, Southerns reported a pre-tax profit of £4m on revenues of £44m.
Styles & Wood is listed on the AIM market on the London Stock Exchange. The management team, which includes Tony Lenehan (CEO), Phil Lanigan (CFO) and Paul Mitchell (chairman), has re-focused the group over recent years, expanding its service offering, eliminating loss-making business and creating an organisation which is consistently profitable. Styles & Wood‘s turnover in the year to December 2016 was £104.7m with an underlying pretax profit of £4.1m.
It has a diverse customer base spanning the commercial, retail and leisure, and public sectors.
CSHL said the deal will create a group that can capitalise on cross-selling opportunities to a wide range of major corporate and public sector customers.
The executive team of the enlarged group will include Tony Lenehan (CEO), Phil Lanigan (CFO), Paul Mitchell (chairman) and Andrew Kendall-Jones who will become an executive director.
Following the deal, both Southerns and Styles & Wood will be wholly owned subsidiaries of CHSL. Key shareholders in CSHL will include the management team, and Central Square Investments, an investment vehicle controlled by Clipper Logistics boss Steve Parkin.
Mr Kendall-Jones said: “Our business has grown rapidly both organically and by targeted strategic acquisitions.
“We identified the Styles & Wood business as an ideal business to partner with to further develop the range of services offered to customers, and to create an organisation capable of delivering services across the whole spectrum of property and facilities support services.”
Mr Lenehan added: “This transaction creates an enlarged business committed to the crea- tion of a best in class offer within the property services market with a true end-to-end capability, which will enhance the breadth of services offered to existing and new customers of the group.”
Funding is being provided by HSBC and Tosca Debt Capital Fund.
CHSL said the deal will create a group that can offer an end-toend service from concept, design, planning, management and post-development lifetime maintenance, together with specialist services such as M&E design and critical facilities management.
Mr Mitchell said: “In recent years, Styles & Wood has made significant progress with its diversification strategy, driving strong organic growth supplemented by value accretive acquisitions.”