M&A market ‘showing no signs of cooling’
By Gareth Iley, partner at Clearwater International
Whilst Team GB celebrated its most successful Winter Olympics in history, the Midlands region was hit by the ‘Beast from the East’ as snow and ice blanketed the region, the Met office reported the coldest spring day on record.
Looking at M&A the hot activity of recent months showed no signs of cooling, as a number of key transactions took place.
Trade international expansion by acquisition
ParentPay acquires WIS
Coventry-based ParentPay, Europe’s leading provider of school payment and parental engagement services completed its third acquisition of the last 12 months – and it’s first overseas – with the purchase of Netherlands-based WIS, a provider of digital payment and parent communication services to secondary schools.
This follows ParentPay’s acquisition of Cypad, a leader in tablet and web based solutions in January 2018, and the earlier merger with Schoolcomms, a leader in parental engagement software for schools in January 2017.
Founded in 2002, ParentPay, provides services to more than 5 million parents and 12,500 schools across the UK. The platform allows parents to digitally manage payments for their child’s school items, including meals, trips and uniforms. The acquisition of WIS allows the company to capitalise on the growing education eCommerce market in Europe and will increase annual turnover of the group by 10% this year; ParentPay now expects to process more than £1bn in payments.
The transaction is yet another in the education sector in the last six months demonstrating the rising interest in education technology. In October 2017 we saw the purchase of school communication and payment collection software provider ParentMail, by UK business critical software provider, IRIS Software Group.
With school budgets increasingly coming under pressure, there is real demand for innovative technology to make standard processes more efficient. Technology that also helps with better teacher-parent communication has also become hot property, as there is an increasing focus on a combined approach to learning.
Servest acquires Aktrion
Aktrion
The deal marked an exit for private equity firm Graphite Capital, which acquired the business in a BIMBO (Buy-in Management Buyout) in 2004 for approx. £26m. Prior to this Aktrion was owned by Bridgepoint Capital. The private equity firm created the business in 2000 through the acquisition of two companies, Meta Management and QE Companies.
Servest has been fairly active in the UK in recent years, having acquired Arthur McKay and Catering Academy in 2016. Most of the group’s acquisitions have involved companies focusing on one FM vertical – such as catering, monitoring and evaluation, and previously security, through the Stag Security acquisition in 2012. The latest deal marks a different type of acquisition for Servest as Aktrion has a diversified operation. It allows Servest to gain further exposure to sectors including printing, automotive, food and transport, where Aktrion has significantly developed its business.
The major FM players in the UK have struggled in recent years – Interserve, Mitie, and Serco, not to mention the collapse of Carillion – so with the acquisition, Servest will gain market share and establish itself as a leading group not just in the UK, but across Europe.
As Brexit talks stagger on and the UK considers its trading position within Europe and the wider global community, it is really positive to see Midlands-based businesses still participating in M&A activity with an international dimension. Looking internationally for a combination of strategic acquisition targets and vital new investors is crucial if the region’s businesses want to stay competitive and continue their growth trajectories.
