Investment Completion -ACT Clean
14 February 2017
- Yield-producing investment, with significant equity upside potential, in niche market-leader with prestigious client list proved highly attractive for private investors
Associated Continuity Teams Ltd (ACT Clean), a specialist outsourcing company providing managed services to the luxury hospitality sector, is tipped for further growth, having secured backing for its £10.2million MBO from Connection Capital, the specialist private client investment business.
Connection Capital clients provided £5million of investment for the management buy-out of ACT Clean which provides fully managed housekeeping, cleaning and kitchen portering services to top restaurants, high end hotels, private members’ clubs and private hospitals.
This is a challenging area of staffing for the hospitality industry, due to high staff turnover, difficult vetting procedures, training, high regulatory compliance requirements and seasonality issues. By providing a complete staffing, compliance and risk management solution, ACT Clean can deliver services more efficiently, taking away a significant headache and leaving hoteliers and restauranteurs to focus on the value-added parts of their businesses.
Founded in 2006, ACT Clean has grown swiftly, alongside the expansion of upmarket hotels and restaurants in London, and is now the market leader in its luxury niche. Its impressive, long-term client base ranges from Michelin-starred and prestigious restaurant groups such as Caprice Holdings (owner of The Ivy and J. Sheekey) to well-known hotel marques including Claridges, The Ritz, The Savoy, through to the Royal Household.
The company is well-positioned to take advantage of future growth opportunities with five-star hotel stock in the capital scheduled to have increased by 22% from 2015 levels by 2018, with all these new properties having high end restaurants attached. As labour availability becomes more complex as Brexit approaches, this should be a benefit to the business, driving greater propensity for the hospitality industry to use ACT Clean’s outsourced services.
Miles Otway, Partner at Connection Capital, who led the transaction said: “ACT Clean’s leading position in its niche luxury market, experienced and proven management team, prestigious client base and strong pipeline of growth prospects make it a highly attractive investment proposition. We look forward to working with the senior management team of John Stevenson, Gillian Thomson and David Murray to take the business on to its next stage of growth.”
Claire Madden, Managing Partner at Connection Capital said: “This is an established business of scale, operating in a market which is both significant and growing, characterised by positive dynamics which are likely to fuel growing demand for its services in the foreseeable future – just the sort of MBO opportunity that private investors relish but so infrequently get access to.”
“The structure of the deal, which will deliver yield as well as having the potential for capital gain, was also highly attractive to private investors in today’s more challenging investment climate, where many asset classes are offering yields at, or near, cycle lows.”
John Stevenson, CEO of ACT Clean said: “Connection Capital’s investment in our MBO will enable us to drive the business forward as we enter a new and exciting stage in the Company’s evolution. Connection’s team was good to work with - reasonable, pragmatic and approachable throughout the deal process. We have very significant opportunities for growth in our marketplace and we look forward to growing the business with Connection Capital’s support over the coming years.”
If you are interested in receiving more information about future investment opportunities and are not yet a client of Connection Capital, please contact Steve Wilson.