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A Chelverton Investor Club Investment
Elsecar, South Yorkshire
Management Buy Out
How much did Chelverton Investor Club Members invest: £305,000, with a further £670,000 from another Chelverton company, CEPs plc
Date of Completion
Hickton Consultants Limited (Hickton) is the UK’s leading independent provider of specialist clerk of works (CoW) services in respect of building construction, civil and structural engineering, and historic building refurbishment work. CoW services are variously described as, or include, quality assurance, compliance inspection, NEC project supervision, construction supervision, expert witnessing and forensic investigation.
Why did Chelverton Investor Club Members Invest
The business had a 25 year track record and a history of strong growth following the appointment of a new Managing Director. Hickton is the largest player in a small, fragmented market, where its customer proposition is demonstrably superior to its peers, which affords it both strong, defensive qualities as well as a compelling reason to win new business. The market itself is expected to grow over coming years as utilisation of CoW services increases, whilst consolidation opportunities are expected as competitors wrestle with succession planning challenges.
How did we come across the company?
The vendor had appointed a firm of corporate financiers to secure a sale of his business, who introduced the opportunity to Chelverton.
Steady organic growth is expected, with bolt-on acquisitions also possible.
How we have added value
In May 2017 Hickton completed the acquisition of BRCS (Building Control) Limited. BRCS was one of the first companies accredited as a Corporate Approved Inspector, providing building control services for a range of corporate clients from its Chelmsford base. The acquisition represents the addition of a complementary service for Hickton, alongside the core CoW activity, and was sourced, negotiated and executed by Chelverton on behalf of its portfolio company.
In March 2020, a further double acquisition was completed. Cook Brown Building Control Ltd, a leading Approved Inspector business is complementary to BRCS, whilst Cook Brown Energy Ltd, is a growing energy consultancy operation. Both were owned and run by Jim Cook and Matt Brown, who will remain with the businesses, as well as joining the new Group Board. CEPS plc re-invested into a new Topco as part of the transaction, with the partial realisation by Investor Club members representing a c. 3.7x gross return on their initial investment.
Whilst in its own right, this was an opportunity to build scale in Hickton’s Building Control operations, the desire of the two vendors to commit long term to the enlarged entity bolstered the management resource within the business and provides leadership succession for the foreseeable future.
We would expect the business to continue to look at opportunistic bolt-on acquisitions in the coming years.