Specialist contractor and construction business Holloway White Allom is considering several bids for the company, its managing director has confirmed to M&A Deals.
Specialist contractor and construction business Holloway White Allom is considering several bids for the company, its managing director has confirmed to M&A Deals.
Bob Cole said Holloway has received several unsolicited bids by unnamed parties, which corporate finance adviser Cavendish has been appointed to assess. Press reports have speculated that Holloway could be sold for more than £50 million.
The bids came as Cole was assessing various options for refinancing the London-based company. This will be necessary in the short-term as investment firm Matrix Private Equity Partners – which backed the £5 million management buy-out of Holloway from John Laing plc in November 2002 – will seek an exit after achieving more than a return on its investment. Some other shareholders are also looking to leave.
“Certainly from my point of view and the strategic board’s point of view, if we were in a position where we could sell the business to someone of the right fit then it would deal with the shareholder issue. It would also deal with some of the issues in moving the business forward,” Cole said.
“We’ve done really well since the management buy-out, it’s been a huge success – doubled the size of the business [and] more than doubled profitability – but we’ve got lots of plans as we move forward. It might be that being part of a large organisation can help us with that ongoing development.”
The approaches will be formalised in the coming weeks. “If we decide to move forward with one of those approaches, then I would like to think something could be concluded by the end of the year,” Cole added.
Selling the business is not the only option being considered, with an AIM float, secondary buy-out or debt refinancing all possibilities. Nevertheless, a trade sale is the preferred option. “My inclination and the inclination of the strategic board is to be part of a larger organisation that would help us in our ongoing development – further acquisitions, geographic expansion, work overseas,” he continued.
Cole maintains that Holloway could bolt-on other businesses to expand the company’s range of services. This would follow its recent acquisition strategy, which has included buying hand-painted furniture specialist Hutson Designs for an undisclosed sum in January 2007 and home automation firm Gibson Music for £1.4 million in December 2004.
The Hutson deal along with organic growth will help grow Holloway’s turnover to £75 million this year up from £68 million in 2006. It is also estimated that the company’s profits will increase by £500,000 to £4.5 million in 2007.
