A Quercus International team, led by Michael Mortimor, has provided sector-led buy-side support to NVM on their investment to support the management buyout of MRO+ Solutions Group.
MRO Solutions is a highly technical, value-added distributor of critical products to a range of process and manufacturing industries. The Group operates nationally through its wholly owned subsidiaries, MJ Wilson and Helix Tools. MJ Wilson is a specialist value added distributor of process instrumentation and control products servicing the energy, power generation and process industries. Helix provides technical support to a range of precision manufacturing clients supporting their tooling requirements.
Mike Mortimor, Partner, commented: “We are delighted to have leveraged our sector knowledge to support NVM on this transaction. MRO Solutions has a deserved reputation for engineering-led, technical advice that has created an embedded position with customers. Operating in a fragmented market, the combination of a proven senior leadership team and NVM creates an exciting platform for future growth. Following the sale of Wixroyd to Essentra, the transaction once again demonstrates Quercus’ capabilities in the B2B distribution sector”.
Charlie Pidgeon, Investment Partner of NVM said, commented: “Mike and the team provided invaluable insight and support which helped form our view on the business and the market opportunity. Quercus have significant domain knowledge on the end markets and the advice provided has been extremely helpful in formulating our value creation plan”.
A Quercus International team, led by Michael Mortimor and Andrew Clegg, has advised the shareholders of Live Business Limited (“Live Business” or the “Company”) on an investment in the business by Literacy Capital plc (“Literacy Capital”), giving it a significant minority stake.
Since its establishment by Mark Dixon and Dan Lock, Live Business has evolved to become a leading international entertainment supplier to the travel, tourism and leisure industry. It is a prominent provider of turnkey entertainment solutions for global travel operators, specifically in holiday resorts or on cruise ships.
The business is recognised for its reputation for creating award-winning bespoke content, bringing together creative, production and digital capabilities. The capabilities of the business include everything from concept design, digital media content, to West-End style production shows and live entertainment activities.
Literacy Capital’s investment will support the plans of its founders to ambitiously grow the business under their leadership. The founders will continue in their current roles, ensuring that Live Business continues to focus on the quality of their service delivery and deliver high-quality entertainment solutions to its clients.
Mile Mortimor, Partner, commented: “We are delighted to have been able to support Mark and Dan on this transformational investment partnership that will facilitate the delivery of the Company’s ambitious growth plans. Under Mark and Dan’s leadership, Live Business has evolved to become a ‘ best in class supplier‘ differentiated by its utilisation of technology and content innovation, as well as its consistent high-service delivery and continuous effort to further improve its service levels. We are delighted to see Literacy Capital as a partner to Mark and Dan, as they drive the business forward.”
Mark Dixon and Dan Lock, the founders of Live Business, commented: "Working with Mike and the Quercus team has been an amazing and exciting journey from beginning to end. Their attention to detail, knowledge, experience, and skill in handling all matters relating to corporate finance, has made the process an enjoyable and informative experience. Mike’s walked us through every stage of this adventure ensuring complete transparency, reliability, and integrity along the way. He’s navigated our path through tricky situations with class and respect, whilst maintaining a firm grip on achieving our personal goals as business owners. We are delighted to now call Mike a friend and look forward to our next adventure together.”
Quercus International is the exclusive UK member firm of the Terra Alliance International M&A network and in 2023 member firms completed 97 transactions, a 10% increase on the previous year. Deal value 2023 also increased, by over 40%, to $18 billion. The chart below shows that active sectors over the past 12 months include Industrial, Consumer, Energy (including waste) and Technology.
For the five years to December 2023, member firms completed 461 transactions with a combined deal value of more than US$126 billion.
Andrew Clegg, Quercus Partner said:
"Uncertain economic conditions across the globe over the past 12 months make these exceptional results even more impressive and reflect well on the strength of the relationships across the Alliance and the collaborative nature of the network. 2024 is going to bring its own challenges but our current pipeline suggests that UK businesses continue to look overseas for growth and that UK assets are of particular interest to overseas buyers."
Quercus International is delighted to announce that it has advised the Sureserve Group (“Sureserve”) on the acquisition of Swale Heating Holdings Ltd and its subsidiary, Swale Heating Limited (together “Swale Heating”), a business delivering gas and renewable heating solutions to both public and private sector customers. This is the second time Quercus International has worked successfully with Sureserve, having previously sold the group’s lifts maintenance business in October 2023.
Swale Heating was established in 1972 to provide heating services to residential and social housing clients. Today, the business provides installation, repair and maintenance services to 140,000+ households located across South East of England, London and East Anglia, and generates turnover of c.£43m. It specialises in standard boiler installations, technical commercial projects and a range of renewable heating solutions, with comprehensive customer service delivered 24 hours a day, 365 days a year.
The acquisition will expand Sureserve’s footprint across the UK and helps to support its mission to be the trusted partner of choice to the social housing and related public sector in delivering essential and affordable heating, energy saving and compliance solutions.
Graham Levinsohn, Group CEO, Sureserve, said:
“We are delighted to welcome Swale Heating and its 375 employees and I would like to thank Quercus for advising on and executing this transaction. We look forward to working with the management and employees of Swale Heating to furthering our shared success.”
Amanda Hall, Partner, who led the Quercus team, commented:
“We are delighted to have been able to support Graham and his team at Sureserve on this important acquisition. We look forward to seeing Swale Heating continue to flourish and develop under Sureserve’s ownership.”
Quercus Head of Waste Management Mark Whelan writes:
At this time of year, it is customary to review the events of the year that has just past and to consider what might unfold over the next 12 months.
In 2023 the UK waste industry has largely seen business as usual in the field of M&A. Despite an uncertain economic backdrop, the sector has continued to prove almost irresistible to investors. What I consider to be a profound restructuring of the sector continues apace with three major buyer groups emerging.
Firstly, traditional consolidators like Biffa, Suez, Beauparc and Reconomy continue to acquire smaller operators to strengthen their geographical or functional presence. They are highly experienced at capitalising on synergies through margin internalisation and operating cost optimisation. The most recent example of this being Suez’s acquisition of long-established family business F&R Cawley in December 2023.
The second group comprises new entrants looking to consolidate the more fragmented segments of the sector. Notable examples include Sortera focusing on Construction & Demolition waste, with their acquisition of GBN Services which followed on from their acquisition of O’Donovans in 2022, and Augean expanding its hazardous waste and specialist treatment activities through the acquisition of Future Industrial Services.
Finally, perhaps most significantly, the global infrastructure funds. KKR’s £4.2 billion acquisition of Viridor in 2020 provided a blueprint for a range of subsequent deals almost unimaginable at that time. In 2023, these included the takeover of Biffa by Energy Capital Partners and the acquisition of Enva by I Squared Capital. The Enva sale generated a reported 3.5x return for the seller, Exponent Private Equity, and illustrates the potentially highly attractive rewards available.
Looking ahead to 2024, the UK economy is expected to grow modestly and current opinion polls suggest a Labour government for the first time since 2010. Inflation has peaked and interest rates are now expected to fall. Cop 28 reminds us that the environment remains a global priority and the UK will continue to play its part regardless of who takes power. The waste sector plays an important role in meeting the country’s environmental targets and has historically demonstrated remarkable adaptability to successive legislative and regulatory change.
Against this backdrop, it is difficult to imagine what will stop consolidators and new entrants continuing to expand their reach and I predict another busy year for mid-market M&A.
At the heart of these businesses is a need to move quicker than the competition. Securing additional material volumes or specialist processing and treatment capabilities, either to enhance their current service offering or to ensure business readiness for regulatory change such as EPR, Reg 61, a landfill ban or DRS. We are also likely to see further interest in data capture and analytics and businesses with strong ESG credentials as this increasingly moves up the boardroom agenda.
Whilst potential targets abound, the recent review of Veolia’s takeover of Suez by the Competition and Markets Authority (CMA) underscores the importance of careful target selection. The scale of that deal meant it was always going to come under scrutiny, but the CMA may increasingly intervene as concerns arise about the creation of potentially dominant positions.
Five years ago this article would probably not have mentioned infrastructure funds, but their influence in the UK waste market is now significant and I do not see this changing in the near-term.
This class of investor increasingly views waste management as part of their core infrastructure focus; an essential service where there will always be a requirement from local councils, businesses or individual consumers, underpinned by regulatory and legislative agendas, and recycling targets. They are motivated by the defensive qualities of waste collection/processing and the control of materials, and similarities with other more traditional essential utility type services that they invest in such as water provision/treatment and energy supply. Moreover, acquisitions can often secure volumes of waste to feed other assets in their portfolios, such as EfW and AD plants.
The robustness of revenues and the predictability of cash flow in many waste businesses makes it easier to fund deals with leverage and this in turn can help support higher valuations, especially for high quality assets.
In 2024, infrastructure investors will continue to move for larger assets which meet their investment criteria, despite a shrinking pool of eligible targets, and I predict further significant developments.
Trends at the top end of the market are likely to filter down into the SME sector through smaller private equity firms as illustrated by Palatine Impact Fund’s recent investment in Roydon Recycling and Highgate Capital’s investment in Hopkinson Waste.
Over the past 30 years, working in the waste sector as principal, investor and adviser, I have often been well served by the words of the late US consultant Peter Drucker who said, ‘The best way to predict the future is to create it’. A considerable number of hungry investors are apparently thinking the same way and whilst predicting the future is not without its risks, it seems certain to me that 2024 promises to be another transformational year for the UK waste sector.
A Quercus International team, led by Mark Whelan, Neil Giles and Michael Mortimor, has advised the shareholders of Capital Compactors Limited (“CCL” or the “Company”) on the sale of the Company to Impact Environmental Group (“IEG”), a portfolio company of US Private Equity firm Aurora Capital Partners .
CCL is a leading UK-based designer, manufacturer and supplier of waste compactors and recycling balers, operating from a state-of-art, purpose-built manufacturing and office facility in Barnsley, South Yorkshire, supported by its head office and support centre located in Bognor Regis, West Sussex. CCL was founded in 2000 by Alistair and Jo Lindsay, both of whom have led the business since its inception.
CCL becomes the fourth major UK waste products and services business to join IEG alongside Taylor, DuraFlex and UKCM. IEG’s decision to acquire CCL supports its customer-service oriented growth plan, which centres on building a comprehensive waste solutions business in the UK through ‘Best of British’ brands focused on sustainability. IEG anticipates a seamless transition as all of CCL’s employees remain in place including Managing Director, Daniel Parsons and Technical Director, Laurence Lindsay, in addition to support by IEG’s EMEA Managing Director, Mike Braddock.
Jo Lindsay, Co-Founder of CCL said:
“When Alistair & I started CCL in March 2000 we had a dream to one day become the UK’s leading supplier of top-quality waste compaction and recycling machinery. 23 years on we believe we have achieved that dream, together with our amazing workforce, and the support of our loyal customers, suppliers and business associates. As the company has grown, CCL’s brand has become highly respected throughout the waste industry. Its reputation for providing reliable equipment and excellent service has attracted many offers to acquire the business, but for us to consider handing over our much-loved company we had to feel sure whoever took over would be the perfect fit. We truly feel we have found that in IEG. With the environmentally conscious companies within their Group, we believe we have an ideal compatibility with IEG’s values, culture and strategy, and their acquisition will allow CCL to reach its full potential and continue onto the next level. More importantly, the further expansion offers exciting opportunities to all its staff members - our highly valued Team Capital - who have made CCL a company to be immensely proud of!”
Mike Braddock adds:
“The acquisition of CCL adds yet another premier service offering to the IEG EMEA portfolio. We’ve been so fortunate to build the EMEA family with such respected companies now adding another in CCL. Their value and reputation in the waste industry make us a more complete supplier to our core Customers by providing Bins, Wear Parts, Services and now Compactors and Balers.”
Mark Whelan, Partner at Quercus comments:
“We are delighted to have advised Al and Jo Lindsay on the sale of CCL which they developed and grew from an idea into the UK’s leading manufacturer of high-quality waste compaction and baling equipment. Al and Jo were keen to retire and asked Quercus International to help them find a buyer who would both protect and enhance their legacy. Through a pre-existing relationship we had with IEG in the UK, we found a buyer that would be able to do just that. We are sure that under IEG’s ownership, CCL and its excellent team will continue to flourish and innovate and be able to maintain its position as a key provider of waste management and recycling solutions in the UK.”
This transaction illustrates the strength of Quercus International within both the waste and industrial sectors, and the third completion within the industrial sector in as many months.
A Quercus International team led by Tully Cornick and Andrew Clegg has advised Sureserve Group Limited (“Sureserve”) on the sale of Precision Lift Services Limited (“Precision”) to Anlev UK Limited, a subsidiary of ATAL, a Hong Kong listed electrical and mechanical engineering service provider.
Based in Essex, Precision sells, installs and modernises all types of lifts and provides repair and maintenance services to clients across the South East of England. Sureserve had previously announced that Precision was no longer core and that they were looking for a new owner who could help the business to realise its growth ambitions.
The acquisition represents another milestone in ATAL’s strategy to expand internationally following the establishment of Anlev UK in 2020 to enter the European market. Today, Anlev manufactures products from its own facilities in Nanjing, China which are exported to over 20 countries across six continents.
Nicholas Chapman, Group Commercial Finance Director of Sureserve said:
“We are delighted that Precision is now joining an organisation focused on maximising the growth opportunities in the UK lifts market. We are also pleased to have benefited from the expertise and advice of Quercus International whose experience and commitment were significant factors in achieving a successful result.”
Tully Cornick, Associate Partner of Quercus International, added:
“We have very much enjoyed working with Nik and the Sureserve team on this important transaction and we are delighted to have found Precision such a good home. The business has an excellent reputation and longstanding client base and the combination presents Anlev UK with an excellent opportunity to expand their presence in the UK.”
A Quercus Corporate Finance team, led by Michael Mortimor and Andrew Clegg, has advised the shareholders of Blue Bear Systems Group Limited (“Blue Bear” or the “Company”) on the sale of the Company to Saab UK Limited (“Saab”).
Blue Bear is a world-leading provider of AI-enabled autonomous swarm systems for complex defence and security applications. Based in Bedford (UK), Blue Bear employs 65 employees with a turnover of £8 million in 2022.
The acquisition is part of Saab’s continued international growth journey across key markets, which include the United Kingdom, Australia, the United States and Germany.
The combination of Saab’s world-leading products, services and solutions, and Blue Bear’s experience as an agile integrator of AI-enabled autonomous swarm systems will be a powerful driver of Saab’s future capabilities. Blue Bear will contribute to Saab’s existing activities worldwide and Saab will benefit from Blue Bear’s expertise in autonomy and swarming, as well as command and control systems.
Within Saab, Blue Bear will be a centre for Rapid Concept Development providing expertise and scaling-up innovation.
Building on the recent Wixroyd and Keronite transactions, Blue Bear once again demonstrates Quercus Corporate Finance’s strength in the industrial technology sector.
Dr Yoge Patel, CEO of Blue Bear said:
“Mike Mortimor was simply superb. Transactions are stressful - Mike’s adeptness in pulling together different strands of the process, using not just his Corporate Finance knowledge but also his ex-CFO experiences, allowed us to execute with confidence and pace. Grace and humour can often be a rarity in fiscal matters, but it is Mike’s natural style.
This remarkable style combined with his sheer talent and his eagerness to engage whenever needed, was just priceless. Most importantly, I felt very supported throughout the whole process - on my terms, not anyone else’s.”
Mike Mortimor, Partner of Quercus Corporate Finance, said:
“We are honoured and humbled to have been trusted by Dr Yoge Patel to advise on this significant transaction for the UK defence sector. Under the leadership of Dr Yoge Patel and her team, Blue Bear has continually been at the forefront of developing and delivering, AI-enabled autonomous swarm systems for the most complex environments – products and services that will play an increasingly vital role in ensuring a safer world. As a centre for Rapid Concept Development, Blue Bear has an exciting future within Saab.”
Future Industrial Services Limited (‘FIS’), a leading provider of hazardous waste management and specialist industrial service,s has been sold to specialist waste and resource management group, Augean Limited.
Headquartered in Kirkby with sites in Berwick, Hull, Rugby, Honiton and Plymouth, FIS works with clients across government, major utilities and national & multi-national companies to provide a range of specialised and cost-effective hazardous waste and industrial services.
Since acquiring the business in April 2017 in a Northedge Capital backed Management Buy-Out, CEO David Lusher and his team have developed FIS into one of the leading independent providers of hazardous waste services in the UK, dealing with a variety of complex waste streams across its five permitted processing, treatment and recovery sites which includes the UK’s only Mercury recovery facility. Alongside this hazardous waste offering, FIS has established a specialist industrial services business with a market-leading position in Energy from Waste (‘EfW’) plant maintenance and cleaning.
FIS is highly complementary to Augean’s existing hazardous waste operations but also provides the ability to leverage FIS’s portfolio of industrial services into Augean’s customers within the Energy, Nuclear, Construction and Oil & Gas markets.
A team from Quercus Corporate Finance led by Mark Whelan and Neil Giles advised the shareholders of FIS.
Mark Whelan, Partner at Quercus said:
“On the back of continued UK investment in Energy from Waste plants, FIS has established itself as the leading independent supplier of critical EfW maintenance services in the UK. This, coupled with its broader suite of industrial services and its comprehensive hazardous waste collection, treatment and recovery capabilities, made this a compelling acquisition opportunity for Augean. There are significant operational opportunities across the two businesses, with each bringing unique capabilities to the table which will deliver an enhanced service offering for customers going forward. We are absolutely delighted to have worked with David Lusher and his exceptional management team”.
As Terra Alliance celebrates its 20th year, Quercus is pleased to announce that member firms completed 88 transactions with a combined deal value of more than US$13 billion in 2022. For the five years to December 2022, member firms completed 459 transactions with a combined deal value of more than US$115 billion. Over half of last year's deals were in the Consumer, Industrial and Technology sectors.
Andrew Clegg, Quercus Partner and Terra Alliance Steering Committee member said:
"These excellent results are underpinned by deep, consistent levels of cooperation between our 400 colleagues across the globe. Here in the UK, we saw a marked uptick in overseas interest in UK assets in 2022 and we see similar trends in our current order book. Cross-border activity will continue to take centre stage in M&A as businesses seek out new markets for growth and secure supply chains."
About Terra Alliance
Terra Alliance (www.terra-alliance.com) is a leading international alliance of investments banks and corporate finance advisory firms with operations in Africa, Asia, Australasia, Europe, the Middle East, North America and South America. Quercus Corporate Finance is the exclusive UK member firm.
The alliance provides member firms with a strong platform for offering clients enhanced identification of, and access to, potential counter-parties and market intelligence. Terra Alliance was formed in 2002 with member firms covering more than 40 countries.
