The Kinetics Group has become the largest provider of gas installation and maintenance services to the social housing market in London after buying a company in the north of the capital.
The Kinetics Group has become the largest provider of gas installation and maintenance services to the social housing market in London after buying a company in the north of the capital.
The group, which is backed by private equity firm Sovereign Capital, bought TA Horn for an undisclosed sum.
TA Horn’s base in Barnet and coverage in North London complements Kinetics’ business serving local authorities in Central and South London. The deal brings Kinetics’ annual turnover to £80 million with a workforce of more than 900.
This is not Sovereign’s first acquisition in this sector. It formed Kinetics in March when it bought maintenance services company Hudson Engineering Services and then merged it with its Camerons and Seaflame businesses (DC Group).
TA Horn’s managing director, Mark Whittaker, joins Kinetics with vendors Norman Whittaker and Philip Gomes, who have be retained as consultants.
Kinetics’ managing director, Chris Cheshire, said TA Horn has a strong track record of growth. “By combining it with Kinetics, the group will benefit from an enlarged customer portfolio reducing its dependency on any one contract.
“In addition, TA Horn’s long-standing customer relationships, excellent geographic fit, strong incumbent management and commitment to training and development will enhance all aspects of the group,” he added.
Sovereign director Simon Hitchcock said the firm is targeting companies in the social housing sector as part of a buy and build strategy. “These businesses all display the common characteristics of having strong track records, complementary geographies and service offerings, as well as attractive growth prospects.”
The firm’s funding was supported by senior debt provided by Yorkshire Bank’s Specialist & Acquisition Finance division.
The bank, which was led on this transaction by Ian Mansell, previously provided a funding package to support Sovereign’s acquisition of DC Group last year.
Mansell said this is a very important deal for the group. “The acquisition of TA Horn provides an excellent strategic fit with the existing business and further establishes Kinetics as the leading provider of gas maintenance services to the Greater London social housing market.”
Sovereign received legal services on its investment from a team at DLA Piper led by partner Jim Lavery, while Yorkshire Bank was represented by Andrew Madden, a banking partner at HBJ-Gateley Wareing.
Lavery said this is the eleventh deal on which the firm has advised Sovereign. “Having acted on the original acquisition and the first bolt-on acquisition, DLA Piper brought specific sector and company knowledge to the transaction aiding the Kinetics Group in realising its objective of becoming a fully comprehensive support service group which is well placed for the future.”
Madden added: “We were pleased to handle this follow-on acquisition on behalf of Yorkshire Bank. Against a tight timetable, all of the advisers involved worked well together which allowed the transaction to complete within a very short timescale.”
Kenetics’ lead adviser was HW Corporate Finance (HWCF), led by transaction services partner Andy Sumner, who has advised Kinetics on several of its previous acquisitions.
Summer, who was supported by manager Gregg Pendlington, said: “Having advised on previous transactions for the Kinetics Group we were delighted to play a major role in the company’s continued buy and build strategy. We look forward to advising it on other opportunities in the future.”
HWCF also managed a financial due diligence review of the target business, while Armstrong Transaction Services compiled the commercial due diligence report.
Armstrong’s team was led by director Robin Illingworth, who said the firm has worked on several transactions for Sovereign and in particular with Kinetics since it was established.
“The integration of TA Horn into the Kinetics Group is highly complementary for both parties,” he added. “TA Horn is an extremely well regarded North London social housing gas service provider.”
TA Horn’s clients include local authorities and housing associations in North and West London as well as the surrounding Home Counties. Its customers include the London Borough of Camden, Redbridge and Enfield; the district councils of Harlow and Epping Forest; and housing associations such as Homes for Haringey.
