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Short Summary
We are acquiring eight UK construction companies using a buy, build, and exit strategy. Combined turnover is £138 million with an EBITDA of £15.7 million. Each acquisition is at 3x EBITDA or below, aiming to enhance efficiency, drive growth, and exit
Highlights
- Proven track record of building a construction group (£25m turnover).
- DD is 80% of the way completed and the deals are ready to be funded.
- Current vendors staying on within the business to reduce upheaval.
- Profitable from day one post acquisition.
- Exit value has been achieved many times in this market.
Overview
| Target | 100,000,000 |
| Minimum | 90,000,000 |
| Investment Raised | 0 |
| Previous Rounds | 0 |
| Stage | Breaking Even |
| Investor Role | Any |
The Business
We are acquiring eight profitable UK construction companies with long-term pipeline or framework contracts. Vendors wish to remain in the business as they are young and dynamic, reducing takeover issues. The current combined turnover is £138 million with an EBITDA of £15.7 million, and each acquisition is secured at 3x EBITDA or below. The current enterprise value (EV) is £42.1 million, estimated to reach £144 million by year 3, driven by 15% organic growth, group consolidation and multiples arbitrage. We aim to exit in 3-5 years, leveraging a valuation uplift from 3x to 8x EBITDA, as evidenced in the UK market. Conversations with trade buyers are ongoing to ensure a successful exit.
The Market
The UK construction market is expected to remain flat for the rest of 2024, with an anticipated upturn early in 2025. This outlook is influenced by various economic pressures and global uncertainties, including potential policy shifts and delayed investment decisions due to numerous global elections. Companies that adapt by focusing on sustainability and navigating labour shifts will be well-positioned for future opportunities? (Currie Brown)?? (Currie Brown)?. For detailed insights, you can view the full market report here - https://www.curriebrown.com/en/news-insights/insights/2024/uk-construction-market-outlook-report-q1-2024/
Progress/Proof
We have secured Heads of Terms (HoTs) for all eight deals and plan to commence due diligence in the coming week. Our board of directors is highly experienced, with members from the finance, banking, construction, and M&A sectors. Each target company has been trading profitably for over ten years, led by founders who are now looking to collaborate under a group structure for a joint exit. This seasoned leadership and proven profitability strengthen our strategy and position us for successful integration and growth.
Objectives/Future
Our primary objective is to implement a buy, build, and exit strategy within the UK construction market. We aim to acquire profitable, well-established companies, integrate them to enhance operational efficiency drive organic growth, and consolidate them into a cohesive group. By focusing on synergistic opportunities, we plan to elevate the enterprise value significantly. Our target is to achieve a 15% three-year organic growth and position the group for a strategic exit within 3-5 years. This exit strategy is designed to maximise returns, leveraging the increased valuation from 3x to 8x EBITDA, supported by ongoing discussions with potential trade buyers.
The Team
Our team comprises experts in M&A from diverse backgrounds, each working at the height of their profession. Our board includes leaders from the finance, construction, and M&A sectors, providing a wealth of experience and strategic insight. Key members include a head of finance with extensive investment banking experience, a construction industry veteran with a track record of successful project management, and M&A specialists renowned for their deal-making prowess. This high-calibre team ensures we have the expertise and leadership required to execute our buy, build, and exit strategy effectively and maximise returns for our investors.
Richard Brady
Strategic and financial consultant
Richard spent 22 years as a senior executive in financial services - Working for CPP Group as Managing Director for Asia Pacific Region based in Hong Kong, the UK Business Development Director for Zurich Advice Network, as AIA’s Vice President for agency in Shanghai and as the Regional Director for HSBC in the UK. He has spent a further 18 years as an entrepreneur, business investor, advisor, and non-executive director for a range of companies. He has founded, built, bought, sold, turned around and merged 22 companies across 7 countries and specialises in M&A work. Richard has been involved with companies in construction, technology, facilities management, property, finance, recruitment, and training.
Kurtis Rose
Director
With over 15 years of experience in the construction industry, Kurtis Rose is a dynamic leader with a proven track record in deal-making and scaling businesses. Having worked within Tier 1 management teams for Siemens Mobility and Network Rail, he played a critical role in driving complex infrastructure projects and negotiating multimillion-pound contracts. As the founder of CDK Group Services, Kurtis rapidly grew the business to a £25m turnover in just four years, leveraging his commercial acumen and strategic partnerships. Known for his ability to close deals, build relationships, and drive growth, Kurtis continues to deliver exceptional value in the construction and infrastructure sectors.
Colm McCrea
Group Financial Director
Colm is a business expert with over 15 years of experience across a diverse array of sectors, including financial services, oil and gas, mining and construction. Having worked with clients such as Tata Steel, Cemex and Lafarge Tarmac, Colm is now the Group Financial Director of Nexus where he plays a leading role in the group’s acquisition strategy successfully completing deals valued at £12m in the past three years. Known for his strong commercial and analytical skills, Colm is able to build a strong rapport with all stakeholders from employees to directors and investors, built on a foundation of trust and respect.
Darren Chester
Director
With a distinguished military background, including multiple tours and three years in contracting, Darren honed exceptional communication and leadership skills under high-pressure situations. His ability to streamline decision-making and align teams to achieve clear objectives has been central to his success. Darren has led seven successful deals for his own team and over 20 deals for other companies, often resolving negotiations when they became challenging. A strong advocate for collaboration, he values the strength of his network over individual deal gains. Darren’s strategic mindset and ability to ease tensions make him an invaluable asset in high-stakes negotiations.
The Deal
Looking for PKR 1,829,000,000 - Min per Investor PKR 9,100,000 We are seeking £5 million to secure £22m in vendor funding for acquisitions. This investment will be secured by a first charge over the group. In return an investor will receive a 12.5% equity stake and we anticipate an immediate 100% uplift in paper value (3x to 6x multiple). The anticipated exit value is projected at £18m. We would be willing to give away increased equity for increased capital investment. All due diligence and financials will be available in a data room for serious interested parties who are capable of completing the transaction swiftly. This investment will enable us to consolidate and grow the acquired companies, driving significant returns for our investors.