Kinetics Group, a reinvestment, asset management and construction services provider to the public and private sectors, has made its third acquisition in less than 12 months.
Kinetics Group, a reinvestment, asset management and construction services provider to the public and private sectors, has made its third acquisition in less than 12 months.
It bought Walmotts, a Midlands-based gas, oil and electrical installation and maintenance services provider to the social housing sector, for an undisclosed sum.
The deal was backed by Sovereign Capital, which has had the majority shareholding in Kinetics since the buy-and-build of the group in December 2006. This is the sixth facilities management acquisition Sovereign has completed in the past ten months.
The Walmotts acquisition enhances Kinetics’ gas maintenance operations and expands its geographic coverage. The company joins a portfolio that includes Seaflame, Camerons, TA Horn and Hudson.
“In just nine months, Kinetics has seen phenomenal growth, with profits increasing more than 300 per cent,” Sovereign director Simon Hitchcock said. “This latest acquisition demonstrates the advantages of our model in creating value for all stakeholders.”
Kinetics’ managing director, Chris Cheshire, said the group continues to go from strength-to-strength with this deal. “Walmotts’ excellent geographic fit and strong incumbent management will be of great benefit to the group as we continue on our strong growth path.”
Sovereign’s investment was supported by Yorkshire Bank, which provided senior debt and working capital. This package was arranged by Ian Mansell, director of Specialist & Acquisition Finance.
Mansell said the bank was approached to back the deal due to its existing relationship with Kinetics and Sovereign Capital.
“This is the third acquisition for the group that we have worked on with Sovereign Capital since we completed the initial buy-out of DC Group, which ultimately led to the formation of Kinetics Group. We continue to be very pleased to work alongside Sovereign Capital in helping to establish the Kinetics Group as a real force in the marketplace.”
Mansell added that this acquisition will provide the Kinetics Group with a strong presence in the Midlands and an excellent strategic fit with current operations centred in London, the southeast and the northwest.
“The deal enabled the incumbent management team to invest in a successful business alongside a VC, which is committed to driving the group forward.”
Sovereign was advised by a team at Armstrong Transaction Services, led by director Robin Illingworth.
The firm has worked with Sovereign and Kinetics on several previous occasions, with Illingworth claiming that he was initially approached to work with the companies due to his team’s expertise in social housing-related transactions.
He added that there are mutual benefits for Kinetics and Walmotts in this transaction. “Kinetics is already a scale player, but Walmotts provides further geographic spread to the business providing opportunities in the East and West Midlands.”
The vendor was advised by Rochesters Chartered Accountants, led by senior partner Stephen Rochester.
Sovereign, Kinetics and Yorkshire Bank appointed HW Corporate Finance to provide lead advisory and financial due diligence services for the transaction.
Its team was led by partner Andrew Sumner, who said: “Walmotts is a really well run business which will enhance the value of Kinetics Group. The acquisition and integration programme is going extremely well and we were pleased to have brought our sector experience to bear on this deal.”
Walmotts, established in 1983, has long-term contracts with several local authorities and housing associations, including Wolverhampton Homes, Sandwell Homes, South Kesteven District Council and Festival Housing. Its workforce includes more than 100 CORGI-registered gas engineers.
