Renovo Services has kicked off its plan to build a group of maintenance services providers to social housing landlords with the acquisition of 1st Saxon-Clenmay.

Renovo Services has kicked off its plan to build a group of maintenance services providers to social housing landlords with the acquisition of 1st Saxon-Clenmay.

The company was bought for £14 million, funded by Sovereign Capital with debt from Yorkshire Bank’s Specialist & Acquisition Finance.

Yorkshire Bank’s team was led by director Ian Mansell, who said 1st Saxon-Clenmay was an attractive opportunity for Sovereign.

“The maintenance market is consolidating and clients’ preference for larger suppliers is making it increasingly difficult for smaller providers to compete, providing a strong incentive for owners to sell,” he added. “Integrating such businesses into a larger group allows them to benefit from economies of scale and makes them well placed to win new contracts.”

Andy Sumner in the Manchester office of HW Corporate Finance was appointed to provide a financial due diligence review of the target company. His team also prepared a financial forecast and provided lead advisory services.

“This represents Sovereign’s second investment in this sector,” he said. “The business has significant forward contracted income, providing an excellent base from which to develop organically and via acquisition,”

The commercial report was managed by Edward Hikmet, an associate director at Armstrong Transaction Services.

Hikmet said the firm has worked with Sovereign on several of its previous deals. “With a good reputation for its level of service, 1st Saxon-Clenmay represents a solid initial acquisition as part of its buy and build strategy.”