Sale of Drainage and High Pressure Jetting Company
The Company
The mandate for the sale of Buxtons Water Ltd, first came to us in 2015. As one of the UK’s leading Hydrodemolition, Concrete Removal and High-Pressure Water Jetting contractors, over 20 years, the company had become a prominent specialist in delivering hydro-demolition and commercial drainage solutions for its commercial client base.
Positioned at the cutting-edge and committed to excellent industry standards, Buxton Water Ltd offered a safe and efficient solution for the removal of concrete and developed one of the UK’s largest robotic hydrodemolition fleets, enabling the company to deliver manual lance hydrodemolition and robotic hydrodemolition services. As commercial drainage specialists, the company’s solutions ranged from drain unblocking, CCTV drain inspections and emergency repairs through to planned maintenance and new drainage system installations.
The Situation
On this particular mandate, the Vendors asked us not to openly market the business for sale, due to concerns about the perceived risk to staff stability - a commonly held and legitimate concern that Vendors face throughout the sensitive process of a business sale. With this instruction in mind, we applied ourselves to a researched and targeted approach, turning to our database to identify and select serious buyers to present this opportunity to directly.
This approach succeeded in generating more than 50 enquiries for Buxton. However, the early stages of marketing proved to be a challenge due to an issue affecting the valuation of the company. Whilst the company made higher than average profits for the construction services sector, Buxton was also a sub-contractor in a sector which does not traditionally attract high valuation multiples. As a result, the several offers made to acquire the business, were not attractive enough for the vendors to accept.
Marketing this opportunity to the private equity and investment sectors also required careful consideration, as firms in this sector were particularly cautious of the operational and potential personal injury risks associated with hydro-demolition work.
The Outcome
We eventually presented this opportunity to an investor who was building a construction services group, and who had previously acquired another Hornblower mandate. We therefore had a good understanding of their strategy and considered Buxton should fit well into their plans. The acquirer, an independent investment firm with a portfolio of construction and facilities management firms turned out to be an ideal fit for Buxton to scale and attain access to a wider client base.
With Heads of Terms signed in September 2020 and the deal finally completed in December, it is clear that to promote the best interests of the vendor, secure a suitable investor and get the optimum outcome, some deals will inevitably take longer to complete.
The Vendor acknowledged the importance of our approach, with Carl Pendleton, the company owner stating that, “Hornblower Business Brokers enable(d) us to realise our exit from the Business we’d built up over the past 20 years. Mark Sykes took on the difficult task of selling our niche company and following a few near misses over the past 5 years he paired us up with RDCP Investments with whom we’ve secured the deal that finally paves the way to our retirement”.
We are pleased to have reached such a favourable outcome for Buxton. This opportunity has demonstrated to us that the qualities of commitment, patience and perseverance are often required when matching the vendor with the right buyer. The process was led throughout by our International M&A Director and Business Sales & Acquisitions Consultant Mark Sykes.
SOLD – December 2020
