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Sunday, 25 February

British FM Expertise Fuels M&A Activity

The UK building and facilities services sector has grown by £15 billion since 2011, with a total UK market value of £125 billion in 2016, according to the latest research from Livingstone, the international mid-market merger & acquisition and debt advisory firm.

Livingstone’ analysis also shows a resurgence in M&A activity over the past 5 years, with a 96% increase in overall deal activity occurring since 2012, from 26 transactions to 51 in 2016 - and over 20 deals already made so far this year, nearly as many as were made in the entire of 2012.

The results point to a degree of resilience within the M&A market despite the political and economic uncertainty associated with geopolitical changes such as Brexit. Furthermore, the analysis points to renewed foreign interest in UK assets associated with the building and facilities services sector incentivised by a stable economy and weak pound. Examples of transactions include Land Engineering by Idverde this month, Westway by ABM and Trios group by SPIE.

Hard facilities services, such as maintenance, refurbishment and mechanical services have made up the majority (59%) of M&A activity over the past 5 years, with Mechanical and Electrical (M&E) being the most popular sub-sector, accounting for 29% of deal volume over the period. There has been a large spike in M&E transactions in the past 2 years especially, with 43 deals being made in 2015-16 compared to just 23 for the period of 2012-14.

Jeremy Furniss, Partner at Livingstone, said on the findings: “The M&A markets have demonstrated great resilience in the face of daunting levels of uncertainty driven by the slew of geopolitical developments, not least of which is the growing reality of the UK operating outside of the EU.

“In many ways, this should not surprise us. The UK has always enjoyed a head-start in developing innovative solutions which the rest of the world has increasingly shown interest in accessing through acquisition. However, as the pressure to address escalating employment costs and regulatory scrutiny grow, the UK’s talent for innovation and creativity will have to rise with it.

 “For the time being though, the UK’s place as a facilities and services market of strategic interest to the rest of the world is likely to sustain deal activity well into the foreseeable future.”

Picture: Jeremy Furniss, Partner at Livingstone

Article written by Brian Shillibeer


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