Kinetics Group Ltd (United Kingdom) - Oct 2007

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01 October 2007

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Sovereign Capital has led the acquisition of Walmotts Ltd, a gas, oil and electrical installation and maintenance services provider, on behalf of portfolio company Kinetics Group Ltd for an undisclosed sum. The deal, the third bolt on acquisition completed by Kinetics in the past nine months, was supported with a senior-only debt package supplied by existing financiers Yorkshire Bank. The transaction was directly sourced by Sovereign, which was attracted to the company due to its strong historical performance and its location, which offered the opportunity for Kinetics to establish itself in the Midlands and thereby consolidate the group’s nationwide coverage. The investors intend to make further acquisitions within the next year in addition to driving the organic growth of the business.

Company

Kinetics Group was formed as the acquisition vehicle for the £16m management buyout of social housing maintenance service company DC Group Ltd in December 2006, which saw Sovereign take an 80% equity stake (29 January 2007, page 38). The group, headquartered in London, originally consisted of two subsidiaries, Seaflame and Camerons, but has since expanded to include TA Horn and Hudson and currently generates an annual combined turnover of more than £80m. Castle Bromwich-based Walmotts provides installation and maintenance services for the social housing sector. The company has long-term contracts with a number of local authorities and housing associations and employs approximately 100 CORGI-registered gas engineers. The business has experienced strong growth since its inception in 1983, with an annual turnover of more than £11m.

People

Phil Hinson, Simon Hitchcock and Andrew Hayden handled the transaction for Sovereign.

Advisers

Equity - Armstrong Transaction Services, Robin Illingworth (Commercial Due Diligence)Equity - DLA Piper, Jim Lavery, Rich Wilkey (Legal)Equity - Haines Watts, Andrew Sumner (Financial Due Diligence)Equity - Jelf Group, Barry Clarke (Commercial Due Diligence)

Sourced from: 0 unquote" 356 (Nov 2007)