Latest News – Sale of MLP Traffic Ltd to Amberon Ltd
9 Sept, 2019
In Plant Hire & Equipment corporate finance, we are delighted to have advised the owner of MLP Traffic Ltd on the successful sale of the company to Amberon Ltd, backed by H2 Equity Partners.
The purchase is expected to further strengthen Amberon as one of the UK’s leading traffic light and management providers by adding new, specialised high-speed traffic services to the group.
Positive M&A Indicators in the market
Our conversations with acquirors in Plant Hire & Equipment confirm that M&A is being driven by activity in construction and infrastructure markets and this will continue in the medium-term.
For example, the National Productivity Investment Fund has £600bn to invest over the next ten years into large infrastructure projects, and has earmarked £6.5bn for transport and £13bn for housing projects.
The UK is also seeing supportive government housing policies, low interest rates continue, and with skills shortages intensifying, more contractors are looking to hire equipment rather than tie up capital in fleet.
Buyers Sentiments
Aggressive levels of competition are creating the need for plant & truck hire companies to scale. We’re seeing high levels of consolidation activity, a trend that is likely to continue as the large UK public companies (including Aggreko, Ashtead and Speedy Hire) represent just a quarter of the market.
Buyers are diversifying their activities into growth sectors, such as specialist hire and adjacent services. Enhancing geographical coverage is another strategic rationale for acquisitions.
Private Equity
Private equity investors we talk to are open to investing in this sector, and they’re often well positioned to help drive operational improvements and support the management team. Private equity represents 15% of all transactions in the sector globally, and 20% in the UK.
Recent transactions include Business Growth Fund’s £5m investment into Plantforce Rentals last year and this August Pricoa Capital acquired access platform rental company AFI-Uplift from Rutland Partners in a £160m deal.
Acquirors worth watching in Plant Hire & Equipment M&A
Ashtead, VP, Aggreko, Speedy Hire and AFI-Uplift have all made multiple acquisitions during the last three years. Some have developed capabilities in specialist market niches where it is possible to drive higher margins.
For example, VP is a niche industry operator that has positioned itself to avoid the cut-through competition of general equipment hire (as has become the challenge of Speedy Hire and HSS Hire). It has seen strong results on the back of the £42m acquisition of Brandon Hire at the end of 2017, with sales up 26% (to £383m) and profits up 9% (to £34m) in its latest year. It continues to acquire to bring a new product specialisations, and most recently in April in paid £3m to buy Sandhurst Manufacturing Co, a provider of excavation equipment, from founder Tim Dean.
Speedy Hire’s strategy for in-fill acquisitions has continued with its acquisition in March of aerial and access platform specialist Lifterz for £22m, a multiple more than six times its normalised EBTIDA of £3.3m. The consolidation will release cost and revenue synergies, and it means Speedy can expand its larger specialist equipment offering nationally.
Overseas Interest in Plant Hire & Equipment
Overseas investors are playing a significant role in M&A activity, with almost a third of UK acquisitions in the sector coming from an overseas bidder.
Enterprise
In March US-headquartered vehicle leasing group Enterprise bought Hampshire-based vehicle hire business SHB Hire from the Street family. The deal gives Enterprise access to the biggest hire fleet of HGV tippers and crane lorries in Europe.
Loxam
France-HQ construction equipment hire group Loxam is increasing its UK and European presence through buy-and-build. It has acquired 11 companies in the past 3 years, including in 2018 a £61m deal to buy UK Platforms from HSS Hire, consolidating its market position in the UK powered access market.
The Rockworth approach to collaborative corporate finance in Plant Hire & Equipment
Rockworth Round-up
Our experience shows us that successful transactions in Plant Hire & Equipment M&A are the result of exhaustive market research processes, numerous in-depth (but anonymous) conversations with C-suite figures, multiple discreet meetings with potential acquirors and a truly competitive bidding process.
Realising growth
We work with private companies providing lead advisory business sale and transaction services and long-term exit-planning and strategic growth.
Uniquely confidential
We combine creativity and hard evidence to create a choice of options for our clients. We always focus the market down to serious interest before even revealing the existence of a client, let alone a client’s identity.
Maximising value
We offer pre-sale planning advice and how to approach and prepare for a deal, giving insight on maximising the value from a transaction.
Rock Solid Standards
We guide our clients, with rigorous attention to detail, throughout the negotiation and due diligence process until the deal is completed. Our approach is open and collaborative, keeping clients in full control of the transaction.
Discover the potential of your business
Explore our online portal, Value-Vault. It’s a free-to-access, no-obligation questionnaire and is designed to provide either a standalone ‘health check’ for a business, or to form the starting-point for a more comprehensive process in preparing your business for sale.
