The recent increase in Property Services M&A
Despite a challenging macroeconomic environment, we have seen the Business Services sector, and in particular businesses providing critical Property Services, has bucked the wider downturn in the deals market in 2023. Property Services M&A is on the rise.
We have witnessed M&A activity across both private equity platform investments and trade acquisitions for Property Services businesses supporting social housing associations.
Property Services in the social housing space is considered an attractive end market:
- Local authorities and housing providers are needing to reverse years of underinvestment from the government over the last decade as a result of austerity measures. Housing associations are being targeted in the media for the (sometimes) sub-par state of their housing stock, issues such as damp and mould are sure to hit the headlines again this winter;
- Regulatory requirements remain and are only expected to become more onerous in the future. Areas such as fire safety is requiring increased compliance, whereby an outsourced option ensures housing associations are meeting legislation;
- The Government net 2050 targets require significant investment to ensure the UK housing stock is energy efficient. The spending and government funding available to assist in the decarbonisation efforts, ensures a further attractive end market for Property Services businesses specialising on schemes such as ECO or Sustainable Warmth.
This focus has generated a positive momentum in activity and valuation multiples for Property Services providers, in what was previously a less attractive sector, especially for private equity.
Key recent deals in the Property Services space are as follows:
|Key Property Services Deals|
|Buckthorn Partners||Cardo Group||May-23|
|Apollo Impact||United Living||Jun-23|
|Cap10 Partners LLP||Sureserve Group||Jul-23|
The attractiveness in the sector can be seen from both the likes of experienced investors such as Apollo Impact (division of US PE firm Apollo Global) and H.I.G entering the space, alongside newly formed investors such as Cap10 choosing to make their first investments in the sector.
From our experience with speaking with other private equity investors, they are also targeting platform investments in the space, whilst the investors already in the sector are looking for bolt-on acquisitions for their platform investments.
It is sure to be a sector that bucks the trend against the wider deals market in the remainder of 2023 and into 2024.
How we can help
If you are a business operating in the Property Services sector and would like to discuss further the recent Property Services M&A activity to assess your next steps and longer term goals, please get in touch with our specialist Business Services advisory team.
The information was correct at time of publishing but may now be out of date.