HIG Europe, the European arm of global mid-market firm HIG Capital, has taken a stake in Europa Facility Holdings. It has also backed Europa’s acquisition of United Utilities, a rival facilities management company.
It is HIG’s first investment in the UK since opening a London office last year and closing closed its dedicated European fund, HIG European Partners, at €600 Million (£400 Million) in July 2007
Paul Canning, a managing director at HIG, said Europa’s takeover of United Utilities was the first step in a buy and build programme typical of HIG’s strategy.
In addition to taking a stake in Europa, HIG has made a significant capital commitment to support Europa’s acquisition programme. The overall value of the transaction is £25 million.
Growing by some 4.2 percent since 2003 according to a 2007 report by Market & Business Development, which specialises in business to business market research reports, the UK facilities management market is currently worth £110 billion per year and is expected to reach £128 billion by 2011.
Canning said: “Europa is a classic platform: high growth, high quality team that know the market well. It is quite fragmented in the UK. There are one or two big guys and not a lot of medium-sized operators. That’s an opportunity.”
Canning said HIG was backing Billy Allan’s team, which acquired a significant stake in Europa 18 months ago, to repeat the success Allan enjoyed in the 1995 buyout of EJ Steill, a mechanical and electrical maintenance company.
He developed the company to become the UK’s leading privately held facilities management company with a turnover of £120 million. The business was acquired by McAlpine in 2002.