News on 15 December 2000
Consolidation continues in the facilities management market
with the news that Tilbury Douglas is to buy Building
& Property for £74.8m.
Building & Property was formed through an MBO of Building & Property
Management Services in 1996, led by Clive Groom and financed by CVC. BPMS
was itself created from two of the regional building management divisions
of the PSA, following privatisation in 1993. Groom, Building & Property's
chief executive, will join the Tilbury Douglas Board as an executive director
on completion of the acquisition.
B&P has developed into one of the UK's leading facilities management
companies, with particular success in the MoD and PFI markets. It employs
around 2,400 people and is currently ranked fourth on the i-FM Top 20.
The company's turnover in the year to December 1999 was £194.6 m,
with earnings of £5.7m. It anticipates turnover this year of around
£230m, with earnings of around £6m.
Tilbury Douglas is a broadly based international construction and support
services group, employing over 8,000 people. It turned over £769m
in 1999, with pre-tax profits of £35.3m. For the six months to June
this year, it made profits of £17.2m on turnover of £449m.
The group operates in three principal areas: support services, equipment
services and construction services. It also has a capital projects capability.
Facilities services falls under the support heading and includes the Interserve
business, formerly part of the How Group which Tilbury Douglas acquired
in 1998.
Tilbury Douglas' recent contract wins include maintenance of BT buildings,
worth £200m over five years, and facilities services for Eli Lilly,
valued at £19m, also over 5 years. It is also an equity partner
in PFI schemes, including Sheffield Schools, worth £240m over 27
years.
Tilbury Douglas says the acquisition offers a number of operational and
strategic benefits. The two businesses are complementary and the combination
will broaden Tilbury Douglas's services offering. Building & Property's
range of services will also allow the enlarged group to offer a more integrated
service.
The scope for cross selling, PFI opportunities and expansion into overseas
markets were also cited as advantages.
Under the terms of the acquisition Tilbury Douglas will assume Building
& Property's net debt of £10.2m at completion. In addition,
as part of their consideration, 2.01 million new Tilbury Douglas shares
will be issued to the management and employees of Building & Property
although almost half a million of these will be deferred, pending financial
close of a PFI contract. Prior to the Acquisition, CVC owned 75% of the
issued share capital of Building & Property and the management and
employees collectively owned the remaining 25 per cent.
