Endless backs £18m MBO of Kier Group division
ENDLESS LLP has backed the MBO of the fleet and passenger services division of Kier Group for £17.9m.
The Lincoln-based business, which has more than 500 employees, will trade as Essential Fleet Services.
It has agreed a five-year deal with Kier to provide fleet services to its local authority highways and utilities businesses, while it will also take on finance lease debt of approximately £32m.
Kier acquired the business as part of its £221m acquisition of May Gurney in 2013, and the business had previously traded as TransLinc. Its operations are mainly in Yorkshire, Lincolnshire the North West and the South East.
Kier’s chief executive Haydn Mursell said “in light of our strict return on capital requirements, we concluded that it would be appropriate to dispose of FPS to a specialist operator”.
Company documents have identified opportunities outside its core work in markets worth £700m a year and it has spent the last year realigning the business to enable it to focus on business outside of Kier Group companies and to these additional markets. That included the sale of its plant hire division to GAP, which was announced in July 2014.
In the year ended June 2014, FPS reported third party revenues of £36m, a profit before interest and tax of £4m and had gross assets of £55m. It estimates its financial year which ended on Tuesday will show third party revenues and profit before interest and tax are £34m and £5.6m, respectively. Endless puts the company’s turnover as being approximately £43m.
Essential’s managing director Ray O’Toole, who led the MBO alongside operations director David Liston, said, “This is a really exciting time for our company and for our people and we are delighted to have Endless as our new partner. Endless was immediately aligned with the growth ambitions of the management team and the future for Essential feels very bright.”
Mathew Deering, partner at Endless, added: “As soon as we became aware that Essential was non-core to its parent’s strategy, we knew we wanted to back Ray, David and the team in the transition to an independent business.
“We are delighted to have partnered with Kier to become the new owners of a strong and well-invested business with an attractive long term growth plan, and we look forward to working with Kier as a valued customer to Essential moving forward.”
It is the latest MBO backed by Endless in 2015, following on from deals at High Street TV, Adare Group, Ink Global and FMG.
Endless was advised by Eversheds, PwC and KPMG and the MBO team was advised by Sentio Corporate Finance, Squire Patton Boggs and Deloitte. Kier Group was advised by Deloitte and Dentons, with vendor due diligence provided by Grant Thornton.
