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IK Partners to invest in HSL Compliance

IK Partners (IK), via the IK Small Cap III Fund (IK SC III), is to invest in HSL Compliance (HSL), a provider of environmental compliance services in the UK, alongside the management team who are re-investing as part of the deal.

The investment follows HSL’s successful six-year partnership with LDC, the private equity investor which is part of Lloyds Banking Group. LDC is also reinvesting in HSL for a minority stake alongside IK as the majority owner to support the continued growth of the business.

Financial terms of the transaction are not disclosed and completion is subject to customary regulatory approvals.

Headquartered in Herefordshire and founded in 1976, HSL is a UK environmental testing, inspection, certification and compliance (TICC) company which provides a range of services across water hygiene, water treatment, and other compliance activities. The company has extensive national coverage with 19 offices across the UK and Ireland and employs approximately 650 people who serve a diversified base of more than 370 customers across a variety of private and public sectors, including Food and Beverage, Manufacturing, Facilities Management, Healthcare, and Education.

Since LDC’s investment in 2019, HSL has quadrupled pro-forma revenues to £77m and doubled headcount to 650 employees, establishing itself as a high-quality business capable of meeting the needs of nationally or regionally complex estates seeking a full-service provider for water hygiene and treatment services, alongside fire and air compliance services. With LDC’s support and follow-on funding, HSL has delivered a successful M&A programme and completed 11 bolt-on acquisitions, significantly increasing the breadth of its UK coverage and client base.

In partnership with IK, HSL will aim to lead the market in delivering solutions that keep its clients’ people protected, their businesses compliant and their environments safe. Through its extensive experience of investing in TICC platforms, IK will work closely with the HSL management team to accelerate growth both organically and through further consolidation of its target markets.

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