Deal in Focus: Mobeus and Maven score 6.8x on Westway exit

Alice Murray
10 December 2015

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Mobeus and Mavenтs exit of Westway to US trade buyer ABN showcases the benefits of investing in employees and aiming to create a strong culture throughout a business. Alice Murray reports

Mobeus Equity Partners and Maven Capital Partners have sold Westway Services to US trade buyer ABM, generating a 6.8x return.

Mobeus and Maven jointly funded the management buyout of Westway in 2009. According to unquote" data, Maven invested £2.55m and Mobeus (then Matrix Private Equity) supplied £1.54m.

In December 2014, Maven increased its equity stake in the business via a £3.6m replacement capital deal, which allowed one of the former leaders of the business to exit and for the equity to be reshaped around the new management team.

Under their ownership, the company's turnover has grown from £9.6m to forecasted turnover of £50m for this year, with EBITDA rising from £2.1m to £5m. More impressively, headcount has swelled from 38 to 535.

According to Bob Henry, the partner who led the sale for Mobeus, Westway's impressive growth can be attributed to the management's clear dedication to training its staff and offering clear routes to progression. This strong culture has resulted in well-trained, highly skilled employees who are deeply motivated to provide the best service possible, says Henry: "Because the management team has invested on an intellectual level in staff, now there are people at a managerial level who were apprentices when we first invested."

Established in 2001, Westway provides technical building services for planned and reactive maintenance contracts. The business offers mechanical and electrical engineering services for heating, ventilation, air conditioning, refrigeration and electrical installations. One of its main clients is M&S, while others include Fitness First, Camelot and Standard Life.

All in it together
Henry adds that businesses operating in this space often fail to involve their staff on wider company issues. While Westway essentially employs a blue-collar workforce, it ensures employees are consulted on key contracts and decisions.

"Another key factor behind Westway's growth is that all employees are encouraged to find efficiencies and share these savings with their clients. This means they are more successful at winning contracts and are more likely to retain them by offering really good value," says Henry.

Westway's commitment to its employees has been reinforced through the opening of a new dedicated training centre earlier this year. This development also highlight's Mobeus and Maven's commitment to the company; with an exit on the horizon it is unusual to see this sort of activity as it tends to eat into profit margins, when typically private equity owners would be more focused on boosting profits to ensure an optimal valuation can be achieved. "It's more important to have a good, well-paid employee base," explains Henry. "In this sector, it's all about management style."

Indeed, the sale process for Westway was very competitive, with interest coming from two French trade buyers as well as private equity firms.

Advisers
Vendors – Blake Morgan, Guy Constant, Timothy Coles, Madeleine Mould (Legal); Livingstone Capital Partners, Graham Carberry, Jeremy Furniss, Tom Smith (Corporate finance).
Company – DLA Piper, Jonathan Watkins, Christopher Wilson, Alexandra Holden (Legal).