Strategic Team Group in £11m restructure

STRATEGIC Team Group, the business which provides building services to the public and private sector, is expecting to increase its workforce by 10% a year after undergoing a restructuring valued at more than £11m.

The deal with STG, based in Castleford, West Yorkshire, sees founding shareholders, managing director, Andy Watson, business development director, Charles Tweed and operations director, Gary Taylor, selling a significant minority stake to Barclays Ventures, which has funded the move.

The three directors are to stay with the business following the deal.

A share pool has also been made available to incentivise key senior employees at the building contractor.

Senior debt and working capital has been provided by Yorkshire Bank, while the Leeds office of accountants and business advisers PKF acted as financial adviser and co-ordinated the deal.

Established in 2000, STG, which also has an operation based in Glasgow, has 165 employees and expects to increase turnover to more than £32m over the next 12 months.

The deal is expected to allow the firm to increase staff numbers by 10% each year.

STG offers a full range of services to support every stage of the property building cycle, including design and build, refurbishment, conversions, fit-outs and maintenance.

STG sees itself as a key player in the Government's drive to improve the UK's social housing stock as the company is heavily involved in providing refurbishment and maintenance services under the Decent Homes Initiative and new build social housing under the National Affordable Housing Programme.

The company has also been involved in helping several local authorities to meet other key government initiatives, providing property refurbishment and adaptation services under the Disability Discrimination Act, the Independent Living Initiative and upgrading the facilities of primary schools under the Primary Capital Programme.

In the private sector STG provides refurbishment and maintenance services to several national clients including Exxon, Shell, CBRE, DTZ and Vue Cinemas.

Mr Tweed, business development director of Strategic Team Group, said: “The last eight years have been a great adventure, but this deal provides us with a quality institutional investor in Barclays Ventures, which will help us expand our services and our geographical reach even further.

“We have built our business on delivering service excellence and an ethic of fantastic teamwork. Together these will remain core values – we are committed to a 'right first time' policy with our customers and we have created share incentives for our key employees.”

Andy Lees, regional director of Barclays Ventures, said: “We have known Charles, Andy and Gary for over two years and have watched the business develop over this period. There are strong growth drivers in both the public and private markets and Strategic Team Group is well placed and has the track record to capitalise on these excellent opportunities.

“We look forward to backing the team and helping them continue their impressive expansion.”

PKF corporate finance partner Margaret Ferris said: “This committed and forward thinking company has established an impressive platform for future growth and we will continue to enjoy the challenge of working with them.”

Simon Murden, associate director of Yorkshire Bank, said: “We are delighted to have been chosen to support Andy, Charles and Gary in the next stage of Strategic Team Group's development.

“The business has an excellent track record of generating opportunities in both the public and private sector and is operating in high growth markets. We very much look forward to assisting the business achieve its full potential.”

Mr Lees, Dion Hirst and Andy Bate represented Barclays Ventures while Mr Murden and David Maybury represented Yorkshire Bank.

Ms Ferris, Craig Martin and Claire Naylor of PKF advised STG's management and Simon Cuerden of Irwin Mitchell provided legal advice to STG's directors.

Financial due diligence was provided by Matt Copley and Mark Thornton of BDO Stoy Hayward, commercial due diligence was provided by Costi Karayannis and Joanna Ball of PMSI. Other legal advice was provided by Nick Watson and Jayne Aarons of Hammonds.