The Preston-based company specialises in providing a range of internal and external refurbishment services to local authorities and housing associations, primarily in the North West.
Led by Managing Director Tim Forrest, the deal enables a number of minority shareholders not currently involved in operations to exit. The transaction also aligns the shareholding structure to enable the current senior management team to take an equity stake in the rapidly growing company.
The deal was funded by LDC which has invested an undisclosed amount for a significant stake in H.T. Forrest and RBS who provided senior debt and working capital facilities.
Ray Stenton and Jonathan Bell from the Manchester office of LDC led the transaction and Jonathan Bell will take a position on the company’s board. David Bramwell, the former CEO of Peterhouse Group Plc also joins the board as Non-Executive Chairman.
H.T. Forrest was established in 1955 as a small joinery and manufacturing firm. It now employs 275 people and provides a fully integrated service for the procurement of large scale housing regeneration and community renewal schemes. The business has expanded rapidly over the past four years with turnover rising from £9million in 2003, to £40million in 2007.
Following the transaction, sales are expected to grow significantly over the next three years and the business is set to increase its workforce as it develops in-house specialist services such as electrical, mechanical and gas engineering.
The opportunities for maintenance firms working in the social housing market have grown rapidly due to rising government spending in the sector.
The Decent Homes Standard introduced in 2000 has seen a commitment to annually invest £10billion to bring all social housing up to an acceptable standard. With 603,000 social dwellings, the North West has 12 per cent of the UK’s stock and is the third largest region behind London and Scotland.
Herbert T Forrest refurbishes in excess of 11,000 homes per annum, carrying out work ranging from single service contracts, such as roofing or kitchen installation, right through to delivery of complete schemes. The business is also securing more contracts in other public sector markets such as education, health and local councils where it can offer a full construction service.
Tim Forrest said: “This deal is a huge opportunity for the business and our employees and puts us in a strong position to continue building on our recent success. “It also enables those who have played a crucial role in the development of the business realise some of the value they helped create. “In LDC we’ve secured the backing of a sophisticated private equity firm that has valuable experience in our sector and a strong track record of working in partnership
with firms like ours to drive further growth."
Ray Stenton, Investment Director at LDC, said: “LDC has been hugely impressed by the business and the management team, which is undoubtedly one of the most experienced and professional in the sector.
Jonathan Bell, Investment Manager at LDC, said: “We’ve now got the opportunity to combine this strength with LDC’s own expertise and strategic insight, to take the firm into its next phase of growth.
“The deal is a great example of effectively empowering an established management team and enabling them to make increasingly significant contribution to the business’ success.”
LDC notes to Editors:
LDC (Lloyds TSB Development Capital) is part of the Lloyds Banking Group and is authorised and regulated by the Financial Services Authority. LDC has, since 1981, completed over 400 investments, has ongoing interests in over 60 businesses across the UK. LDC back ambitious management teams from UK-based companies seeking between £2m and £100m of equity for management buy-outs, institutional buy-outs or development capital transactions. LDC invests in a broad range of sectors and has particular experience in financial services, healthcare, industrials, IT & software, leisure & media, retail & consumer, and support services.