Lyceum Capital has funded the merger of two of the UK’s biggest independent drainage companies – a transformative deal which creates a GBP50 million turnover, market-leader in the provision of specialist services to the household, industrial, commercial, transport and water sectors.
In January 2010 Lyceum Capital acquired a majority stake in the largest drainage claims manager in the home insurance market, UK Drainage Network (UKDN). The mid market investor has implemented a programme of organic growth which has driven a 30 per cent increase in revenues since the acquisition.
The merger of UKDN with Slough-based Waterflow Holdings is the first in a series of transactions originated off-market by Lyceum Capital which will grow the enlarged business’ service lines and geographical coverage.
Solihull-based UKDN provides claims management, remediation, validation, investigation and repair services for most of the UK’s largest household insurers.
Waterflow specialises in providing CCTV inspection, maintenance, renovation and repair of drains and sewers in safety and time critical environments for clients such as Thames Water, Anglian Water, Network Rail, London Underground, The Highways Agency, Balfour Beatty and other leading contractors.
The merger will see the enlarged business’ turnover rise to £50 million and will create a 500-strong team of directly-employed skilled operatives working across its nationwide network of 17 depots.
Simon Hitchcock (pictured), Partner at Lyceum Capital and Non-Executive Director of UKDN, says: “Waterflow is a high-quality business which is a great fit for UKDN. The enlarged business will provide customers with a full range of drainage services, geographic coverage and technical expertise as well as a much deeper level of resources.
“This is a transformative deal for both businesses and is a key step in our strategy to consolidate the highly fragmented drainage services market, where legislation and an increasing focus on driving efficiencies through outsourcing is creating new growth opportunities for businesses with the right reach, experience and skills.
“This is the first of a number of strategic transactions we plan to make over the coming months, providing the enlarged business with further scale and routes to growth markets.”
Greg Beech, CEO of UKDN, says: “By merging we are ideally positioned for the 2010-2015 AMP cycle, which will see GBP22 billion invested in improvements and maintenance of the UK water industry infrastructure, with particular emphasis on protecting and maintaining the UK’s drainage system.”
Waterflow is the eighth add on acquisition Lyceum has made on behalf of its portfolio this year and follows the acquisition of Rights.TV by Compact Media Group in September.
