Connaught takeover secures Deal of the Month
THE move by Midlands-based construction group Morgan Sindall to acquire the majority of ongoing contracts of the failed housing maintenance firm Connaught for £28m has been named as TheBusinessDesk.com’s September Deal of the Month.
TheBusinessDesk.com has joined forces with Birmingham Forward to celebrate the region’s deals and dealmakers. The Deal of the Month award is bestowed on the MBO, IPO, takeover or restructure that in the opinion of the judges shows the best combination of regional involvement, creativity and impact.
Judges said the deal sent out a positive signal to the professional services community because it had helped to secure the jobs of thousands of workers.
Connaught Partnerships, which is headquartered in Leeds, went into administration last month.
The deal with Morgan Sindall saw its Tamworth-based affordable housing subsidiary Lovell Partnerships take on the contracts and their related assets from Connaught Partnerships.
The deal allowed “essential maintenance services to continue without interruption” and around 2,500 employees connected with the ongoing nationwide contracts transferred to Lovell as part of the agreement.
Morgan Sindall said the sum paid for the assets was a discount to their net book value and had been paid from existing cash resources.
A team from KPMG, which was appointed administrators to Connaught, advised on the deal.
Deal of the Month judge Jamie Hope, a partner with Catalyst Corporate Finance in Birmingham, said: “Given all the negative press that Connaught has attracted, this sheds a much more positive light on the situation and has obviously saved countless jobs.
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“Given what is due to happen with public sector cuts this may well be the tip of the iceberg for consolidation in some areas where reliance on public sector spend is key.”
Judges said they had also been impressed with the deal which saw pottery manufacturer Denby acquire rival potter Burgess Dorling & Leigh, which produces Burleigh pottery at Stoke’s Middleport Pottery. They said this had also helped to secure the future of a sustainable company and preserve jobs.
Jackie Hendley, chair of Birmingham Forward and tax partner at KPMG, said: “This month’s winning deal was chosen based on the great economic benefit it delivers to the region. Morgan Sindall is a long standing Midland employer and, as such, the estimated £200m of additional annual revenue expected from the sale – in addition to the transfer of 2,500 jobs from Connaught to Lovell Partnerships – is fantastic news for the regional economy.
“Focusing on regional economic benefit, the acquisition of Burgess Dorling and Grey by Denby pottery is a sterling example of Midland advisers acting to secure the future of a Midland company. It demonstrates the strength of our professional services offering while safeguarding local jobs, and is worthy of an honourable mention.”
