Integrated property services group, Styles&Wood Group plc, has advanced its successful diversification strategy with the acquisition of Keysource Limited – a provider of specialist technical services to the data centre and critical facilities sectors.
The acquisition will enable Styles&Wood to expand into the growing data centre services market and provide new opportunities to broaden work streams with both existing and new customers.
The Group has acquired the entire issued share capital of Sussex-based Keysource for an initial consideration of £2 million in cash and shares, with up to £5 million payable as deferred consideration.
Based in Horsham, Sussex, and incorporated in 1998, Keysource specialises in delivering engineering and technology services for business critical environments and employs in excess of 60 staff. The Keysource executive management team, which will remain with the business, has over 50 years’ experience working with some of the world’s leading organisations across a diverse range of sectors, including finance and banking, education and industrial. Keysource will continue to operate under its existing brand and the deal has been designed to provide it with a stronger operational and financial platform to support its ambitious growth plans moving forward.
The acquisition is in line with Styles&Wood’s strategy to diversify its service offering across key sectors and enhances the Group’s capabilities in technologies and critical facilities.
Styles&Wood and Keysource have an established working relationship as delivery partners on a strategic framework for one of the world’s largest banking and financial services organisations. The Group envisages being able to offer Keysource’s services to its other banking framework customers.
The announcement follows an interim financial results statement on Monday (19/09/2016) which saw Styles&Wood deliver a strong performance in the first half of the year with underlying operating profit up 88.2% to £1.1m (H1 2015: £0.6m), on revenue up 2% to £47.1 million (H1 2015: £46.2m), supported by strong cash generation.
Tony Lenehan, Chief Executive Officer of Styles&Wood, said: “The data centre market is a sector we have been looking to enter for some time and believe it has exciting growth prospects, driven by a combination of macro and regulatory factors. Provision of critical facilities to this market will continue to be crucial as it grows.
“The acquisition follows our successful joint venture with Keysource on an ongoing major banking framework and we have been very impressed with the team’s expertise and project delivery capabilities. With the prevailing market trend for the expansion and improvement of existing facilities, we believe the combined strength of both businesses’ expertise in working in live environments will make a compelling proposition.
“Styles&Wood has a proven successful diversification strategy which has been instrumental in supporting clients across a range of sectors. This acquisition further reinforces our strategic vision and will enable us to broaden our service offerings to existing and new customers and I am excited about the future opportunities for the Group as a whole.”
Mike West, CEO at Keysource, said: “This is a truly exciting strategic move for Keysource. The business is in strong shape and coming under the Styles&Wood umbrella will provide the company and all of our employees with great opportunities for growth in the coming years. In the meantime, it is still very much ‘business as usual’ in terms of client servicing and continuing to build on the fantastic momentum and performance we have delivered this year.”
Headquartered in Sale, Greater Manchester, Styles&Wood provides a full range of integrated property and project delivery services to some of the UK’s premier brands and blue-chip organisations. Its integrated offer includes design, building intelligence systems, facilities solutions and fit-out and refurbishment services which provide clients with the opportunity to optimise the performance of their property assets.
According to the AMA Research Data Centre Construction Market Report published in March 2016 the market for data centres is forecast to reach over £1.1bn by the end of 2020, representing annual growth of 3 to 4%.
Hill Dickinson (Jonathan Gillow) provided legal services; Ernst & Young(Richard Harding and John Williams) provided financial and tax due diligence; and The Quinn Partnership provided management due diligence.