KBS Corporate Finance Advise on Sale of HCD Group Limited

KBS Corporate Finance has advised on the sale of construction compliance company, HCD Group, to the global testing, inspection and certification services specialist, Bureau Veritas.

HCD Group is the UK’s leading firm in Building Control Approved Inspector services. It has been the lead player in taking building control from a lethargic public sector monopoly into a rapidly growing value added private sector service.  HCD’s client base includes industry leaders in construction, high street retail and financial services. The group has nine offices across the UK and has a turnover of £8m.

Paris-based Bureau Veritas is a world leader in laboratory testing, inspection and certification services. The group has around 66,700 employees located in 1,400 offices and laboratories around the globe. The combined business will employ more than 1,200 people in the UK across 14 regional offices.

Tony Dyer, Senior Director and one of the founders of HCD commented “achieving a strong multiple Julian and KBS out performed our baseline value significantly. The way they handled the lead advisory and worked with TLT’s legal service meant that they overcame all of the many hurdles allowing us to focus on the business”.

Julian Coy, Managing Director at Bolton-based KBS Corporate said the firm was able to build interest from across the globe with the three leading bidders all based overseas.  KBS has market leading credentials in the testing, inspection and certification (TIC) market through deals such as the £9.1m acquisition of Testconsult by James Fisher so the team was perfectly placed to advise HCD Group.

The strength of the UK economy, the quality of KBS’s client base and the international reach of its research and knowledge teams is ensuring that KBS is at the vanguard of cross border work in M&A. Julian added: “On virtually all of our deals we are now seeing foreign interest in UK SMEs. In the case of HCD, we attracted interest from many different European firms, all of whom were looking for a foundation investment in the UK. HCD had all the necessary credentials of being No 1 in its markets, with strong margins, high growth and the best management team in the sector. Looking forward, the weakening pound coupled with the continued growth in the UK economy is producing perfect conditions for sustained overseas investment into the UK”.

Bureau Veritas led the transaction from its UK base in London with Ken Smith, country manager for Bureau Veritas in the UK, personally heading up the transaction. “HCD is a great cultural and strategic fit for our business. Both companies lead their respective markets in the provision of specialist services from a highly skilled team. There is also a shared focus on operational excellence and innovation. This acquisition will significantly strengthen our service offering to clients, open up new markets and help us achieve our plans for growth.”

Steve Highwood, business development director at HCD, is one of a number of board members staying on post- acquisition. He added: “This is an exciting and positive new chapter. Bureau Veritas will provide the business with the scale, structure and investment to build on the success of the company to date, offer opportunities for our teams and expand our current service offering to clients.”