In june 2014, we exited our investment in gva, one of the uk’s leading commercial property consultancies, following the company’s merger with bilfinger, the €8.6bn turnover global engineering, construction and real estate services group.
After taking a £40m minority stake in GVA Grimley (now GVA) in 2007, we supported the management team through a challenging period for the property industry.
During the initial stages of our seven-year investment, the sharp economic downturn and credit crunch took hold. This severely affected the commercial property sector and prompted a complete halt in real estate transactions, which caused a fall of around a third in the company’s revenues at one point.
To help give the company strong leadership, Steve Halbert, initially introduced as non-executive chairman in 2008, was appointed interim CEO.
He led a restructuring programme, supported by LDC, which included the business converting from a partnership to a limited company.
Having completed a hugely impressive turnaround and stabilised the business, Steve Halbert stepped down and Rob Bould took over as CEO. Pete Opperman and Bruce Anderson were appointed to the board in 2012 as non executives with the brief of growing the business so it was well positioned to attract a strategic buyer.
In May 2012 a debt for equity swap was completed with LDC converting the LDC loan stock into preference shares and allowing the business to have the financial resources to re-incentivise the employee shareholders. Removing all connotations of distress gave the company the strong platform from which to capitalise on the resurgent property sector and the opportunities it offered.
Despite the recession, LDC helped the business make a number of in-fill acquisitions, which strengthened its market position. In 2011, GVA acquired UK leisure specialist, Humberts Leisure, and last year brought Scottish property consultants James Barr, moving GVA into the top three in Scotland.
A significant part of our brief for Pete and Bruce and a considerable challenge was to secure a consensus among the 300 shareholder employees on the exit strategy. Once this was agreed, Bilfinger was quickly identified as the ideal partner to help take the business forward as it had the ambition to develop an international consultancy led property services business, using the GVA model and applying it worldwide.
Today GVA is trading strongly and well placed to reap the benefits of the international expansion made possible by the merger with Bilfinger. For LDC the deal delivered a 1.7x money multiple and demonstrates the firm’s flexibility and long-term commitment to the businesses it backs.
“This was a hugely complex, people-based business with nearly 300 employee shareholders; it is a credit to LDC that, through what was a very turbulent period in the commercial property sector, they focused on supporting management and helped develop a revised growth strategy that ultimately led to the best outcome for GVA’s investors, management and employees.” PETER OPPERMAN PREVIOUSLY NON-EXECUTIVE DIRECTOR
“LDC’s backing and investment over the past seven years has been very important in helping GVA expand to a position where it can attract the interest of businesses of the international stature of Bilfinger and we thank LDC for its consistent support.” ROB BOULD, CHIEF EXECUTIVE OF GVA
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by Sophie Reed