20 minute read
Rentokil expands with a major US acquisition
OUTSOURCED SERVICE MARKET NEWS AND ANALYSIS SUPPLY SIDE
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Serco exercises right to quit soft services deal with Barts Health Trust a year early
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Engie agrrees to sell its services unit to Bouygues for €7.1 billion. Find out more Visit facilitatemagazine.com for daily outsourcing news
ACQUISITION
Rentokil seeks global lead role in pest control with US acquisition
by Marino Donati
Rentokil Initial is to buy US pest control business Terminix in a $6.7 billion deal. The transaction will bring the two businesses together to create what the firms claim will be a “global leader” in pest control with the two companies having an estimated combined pro forma revenue of around $5.7 billion last year.
Under the deal, Rentokil Initial will acquire Terminix for stock and cash. The combined group, which will be based in the UK, expects to ‘create increased scale in the global pest control market, increased scale in North America – and provide an enlarged platform for profitable growth’. It is also expected to generate ‘material annual pre-tax net cost synergies’ of at least US$150 million by the third full-year post-completion. In a statement, Rentokil said it expected to “have a strong platform for growth, particularly in North America, and an attractive financial profile to support future growth, including through acquisitions and continued investment in innovation and technology.” Andy Ransom, CEO of Rentokil Initial, added: “This is an exciting and transformational combination that will create the global leader in commercial, residential and termite pest control, and a leader in North America, the world’s largest pest control market. It brings together circa 56,000 colleagues, protecting people, enhancing lives in over 87 countries, and serving circa 4.9 million customers.” The boards of directors of both Terminix and Rentokil Initial have
This is an unanimously approved the transaction.and exciting and resolved to recommend transformational combination that their respective shareholders vote in favour of it.
NEW BUSINESS ARM
BIDVEST NOONAN CREATES TRANSPORT UNIT
Bidvest Noonan is to create a specialist business unit focusing on the UK’s transport sector. The division will provide services including cleaning, security, shunting, refuelling and sanitising among others, with the firm having amassed considerable experience supporting many of the UK’s largest bus and rail operators.
Colin Marshall, who previously served on the leadership team of Cordant Services, has been named managing director of the division.
The company said it aimed “to cement its position in the sector and establish a strong platf orm for its continued growth and development”.
Charlott e Marshall, CEO of Bidvest Noonan in the UK, added: “Establishing a sector-dedicated business unit will enable us to improve our performance,, innovate faster and accelerate our growth”.
The company spent plenty of time on the acquisition trail in the UK and Ireland during 2021. It bought security specialist Axis Group in early February, and in March announced its takeover of Dublin-based hard FM provider Interact.. In March, Bidvest Noonan appointed James Dunnett as director of operations for facilities solutions.
TRAINING
by Facilitate team
FM, aviation and charity sectors. Within those sectors, the London Progression Collaboration will be targeting underrepresented groups such as NEETs (those not in education, employment, or training), women in engineering and homeless people.
The two-year partnership will see the creation of level two to four apprenticeships to build skills where there is a skills shortage.
Integrated facilities services provider ABM has pledged £192,000 to enable small and medium-sized businesses and social enterprises to re-skill low-paid Londoners.
Partnering with the London Progression Collaboration, ABM says the contribution will establish apprenticeships that not only help people to secure better-quality, higher-paying work but also give London’s businesses the skills they need to bounce back following the pandemic.
ABM’s investment, a portion of the company’s Apprenticeship Levy fund, which was unspent because of Covid-19, will be devoted to businesses in the
Chris Townsend, ABM’s senior HR director, said: “Covid-19 disrupted many things, including our ability to spend our Apprenticeship Levy funds to their fullest extent. Working with the London Progression Collaboration ensures that that money is used effectively.”
Internally, ABM currently has 89 apprentices on 34 level two to seven courses available across the UK, and more that 60 additional applications in the pipeline. ABM said it is committed to “growing these numbers as greater opportunity to maximise Apprenticeship Levy funding is available, further improving skills and talent within the organisation”.
APPOINTMENTS
EUREST ELEVATES SENIOR BUSINESS DIRECTORS TO MDS
Caterer Eurest, part of Compass Group UK and Ireland, has promoted two senior business directors to joint managing directors to plot strategic growth.
Paul Williams and Nick Haynes, who have both worked for Compass for nearly 10 years, will manage team performance, win new clients and strengthen bonds with existing clients to ensure that deals are renewed.
Although the two men are set to work together on company strategy and be aligned on company-wide aims in areas such as sustainability, they will manage different sides of the business.
Williams oversees Eurest’s big multi-site clients such as Amazon, Porsche, Virgin Media, British Airways, IBM and Heathrow Airport while Haynes manages the company’s single-site UK clients, including Bombardier, The Royal Mint, Halfords and Scott ish Power.
Both will supervise Eurest’s menu offer, visiting client sites to gain feedback on its chefs’ work.
Williams and Haynes… will manage team performance, win new clients and strengthen existing bonds
IN BRIEF
Esoteric to bolster Mitie’s security offering Mitie has acquired Esoteric Limited, a specialist in counterespionage services.
Its security team will be integrated into Mitie Security, which Mitie claims will make it the UK’s largest provider of corporate security services.
Kier reconfirms vow to electrify fleet by 2030 Kier has joined the EV100, a global initiative for companies speeding their transition to electric vehicles (EVs).
The construction to FM group announced its move during COP26. It will electrify its fleet of 3,730 vehicles and support its employees’ EV adoption by installing EV charging stations at 30 UK locations by the year 2030.
Keir says the move solidifies its commitment to having a fully electrified fleet by 2030, a commitment outline in its Carbon Reduction Plan.
M&E firm Weir &
McQuiston goes into administration The firm, based in Wishaw, Scotland, ceased trading in November with the loss of 93 jobs.
Administrators of the family-owned North Lanarkshire company said: “Weir & McQuiston was one of Scotland’s leading M&E contracting firms with a quality client base and an excellent reputation across the construction industry.”
Compass Group
UK & Ireland adopts EV policy Catering company Compass Group UK & Ireland is also embracing a 100 per cent electric car
POSSIBLE INSOURCING
SERCO QUITS FM DEAL WITH BARTS HEALTH TRUST
Serco has announced that it is to cease providing facilities management to Barts Health NHS Trust in 2023.
The trust, which runs five hospitals across the City of London and East London, and is one of the largest NHS trusts in England, was established in 2012.
Serco currently runs portering, laundry, cleaning and security services in the hospitals – but it has now given notice of its departure with effect from the end of April 2023.
The company employs about 1,700 people across the trust group, including receptionists, help desk, and patient catering services, and has pledged to ensure a smooth handover.
The trust’s executive is now considering future arrangements, which could mean bringing FM back in-house.
Serco stated that it is exercising its right to terminate the soft FM deal a year early because it is losing money on the deal that was agreed bfive years ago.
policy for all new fleet cars. More than 500 employees were dye to be given the chance to order an electric vehicle (EV) by the end of 2021. S erco PLC published an updated guide (15 November) to its 2021 performance, following a stronger than forecast trading performance.
The group said it now expects revenue to be around £4.4 billion for the year, and underlying trading profit to be not less than £225 million.
It put this down to several factors that “are unlikely to be repeated”.
First, it said, Covid-19 test-and-trace workloads for governments in the UK and Australia, have been high and have persisted for longer than the group had consequence of the pandemic”, Serco said it would be spending about £10 million on an ex-gratia payment to about 52,000 employees, as in 2020, and “a significant one-off commitment” to its recently established Serco People Fund. The fund offers cash and other support to colleagues who would benefit from a little extra help at this difficult time.
The group said it anticipates that 2022 will see a fall-off in demand for Covid-19related services, but added that this would be partially offset by new work secured in 2021 and growth in its other operations.
anticipated.
Second, several contracts had performed better than expected, particularly immigration-related contracts in the UK and Australia, and its healthcare insurance eligibility services contract in the US, where President Biden’s decision to extend the open enrolment period has resulted in additional volumes.
Third, a number of commercial discussions that the group had been expecting to complete in 2022 are likely to be finalised in the current financial year. Cash generation has also remained strong.
Because of these better revenues, the group increased its cash flow forecast to £150 million and reduced its net debt estimate to £220 million.
In recognition of “the extraordinary efforts of our colleagues around the world and the difficulties experienced by many as a
FINANCIAL RESULTS
Serco trading update reports stronger-thanexpected results
by Facilitate team
Clare Clark joins CH&CO to deliver CSR strategy Catering and hospitality provider CH&CO has appointed a sustainability business partner to deliver its CSR strategy for the group and its clients.
Clare Clark will now be responsible for driving forward CH&CO’s sustainability commitments. CH&CO’s core CSR strategy centres on the key pillars of Net Zero by 2030 (Reduce Waste; Greenest Supply Chain Solution; Creating a CSR Culture).
Cordant finalises Bidvest Noonan integration Aft er six months of planning, the leadership and operations teams on both sides have fully integrated Cordant Services into Bidvest Noonan. (Last May, Cordant Services joined Bidvest Noonan to form a business offering cleaning, security and support services across the UK and Ireland.) With the unification project complete, the combined business will now carry on under the Bidvest Noonan banner. Guy Pakenham, managing director of Cordant Services, said: “Our decision to rebrand has been met with exceptional positivity and goodwill from all of our leadership, support and service delivery teams. We have worked closely with our new colleagues, finding new ways to enhance our business and improve the value we deliver to clients.”
FINANCIAL RESULTS
ISS Group sees upturn in fortunes as business rallies post-Covid by Facilitate team
ISS Group’s trading update for 1 January-30 September 2021 reports an upgrade of its financial outlook.
Organic growth at the Copenhagenbased FM services company’s was 0.7 per cent in the first nine months of 2021 and 2.6 per cent in Q3 2021, but improved during the third quarter, especially in September, as clients saw a return to offices in some countries, which affected activity levels positively.
Portfolio revenue showed initial signs of recovery, which more than offset a smaller decline in projects and above-base work owing to lapsed ad hoc Covid-19-related services.
The group said execution of its OneISS strategy was progressing as planned with further streamlining and standardisation “for enhanced future execution”. It said the turnaround initiatives instituted to drive recovery of the underperforming contracts and countries and the restructurings initiated in response to Covid-19 were moving ahead as planned.
The group completed 12 divestments in the first nine months of 2021 with total net proceeds of about DKK 1.4 billion (£161 million). The statement added that the outlook for organic growth is confirmed and expected to be positive. The outlook is upgraded for operating margin and free cash flow as a result of continued progress of underperforming contracts and countries and progress of Covid-19 restructuring initiatives:
The group operating margin is now expected to be around 2.5 per cent compared with previous estimates of “above 2 per cent”, and free cash flow is now expected to be around DKK 1.5 billion compared with the previous suggested figure of “above DKK 1 billion”. Jacob Aarup-Andersen, Group CEO of ISS A/S, said: “In the third quarter, we continued our work to create a healthier and fundamentally stronger ISS.
I am very pleased with our ability to execute on our OneISS strategy while simultaneously navigating a challenging environment with volatile activity levels as well as high wage inflation and scarcity of qualified employees in certain regions.
“We are seeing customers gradually returning to the office, albeit at varying pace across geographies. We expect a continued measured pace of return in the coming period as infection levels remain high in many countries creating a sense of caution.”
ACQUISITIONS
BOUYGUES TO SPEND BILLIONS ON ENGIE’S EQUANS
Multinational utility company Engie has agreed to sell its services unit to services group Bouygues for €7.1 billion.
The sale of Equans, one of the largest deals concluded in France in 2021, will boost Bouygues’ existing energy and services unit. For Engie, the sale will hasten its goals towards cleaner energy through renewable power generation and infrastructure such as car-charging networks.
Equans, which employs about 74,000 workers in France and installs and maintains air conditioning, electrical systems and telecommunications equipment, generates in excess of €12 billion a year in revenue.
Bouygues will use a combination of existing resources and bank loans to buy the Equans shares.
Equans CEO Jerome Stubler and Pierre Vanstoflegatt e, CEO of Bouygues group’s Energies & Services arm, will determine the new entity’s future structure.
Bouygues has said there will be no compulsory redundancies in Europe for at least five years aft er the deal, and has committ ed to hiring 15,000 to 20,000 new recruits annually to cover staff turnover as well as creating more than 10,000 net new jobs.
Olivier Roussat, Bouygues’ CEO, said: “The acquisition of Equans by Bouygues is a project that creates value for customers, for employees, and for shareholders. This activity will become a new standalone business segment within the Bouygues group.”
IN BRIEF
Chris Nickols appointed chairman of Corps Security Security services provider Corps Security has named Chris Nickols as chairman. He has been on the board as a non-executive director since March 2020 and was a shareholder trustee for seven years before that.
Nickols completed a full career in the Royal Air Force, commanding at all levels and gaining extensive experience in security operations and public sector governance at the highest board levels.
ISS appoints sustainability
head ISS has appointed Tracy Nilsson as global head of sustainability. Nilsson joins from Adidas, where she held a position as senior director, global environment. She will start in her role at ISS on 1 January 2022.
Nilsson has previously held leading sustainability roles with Lululemon, ThinkStep, and IKEA. She is also a steering committ ee member of the United Nations’ Fashion Industry Charter for Climate.
Penguin FM names MD for London and the South Penguin FM has appointed Paul Gisby as its new managing director to carry out expansion plans with the opening of a central London office.
The Leedsbased company is expanding its sphere of activities within London and the South of England. Gisby takes up the senior strategic post, bringing with him over 30 years’ experience within the FM and construction
ACQUISITIONS
Pinnacle acquires AM Services Group
by Facilitate team
Property services and FM provider Pinnacle Group has acquired AM Services Group (AMSG) to extend its service capacity and expertise in the retail, manufacturing, and chemical sectors.
The deal spreads Pinnacle’s footprint across the North of England and Midlands and reinforces its business-to-business offer. Pinnacle said it also augments its ability to deliver “holistic seamless services to a broader range of communities in accordance with their commitment to community stewardship”.
Founded in 2001, Morecambe-based AMSG employs more than 750 people and has a client base with a 96 per cent business retention rate.
The move provides AMSG’s existing and new clients with wider access to technical skills and innovative services and will support Pinnacle’s existing plans to optimise FM growth opportunities. This includes entering the UK catering market by building on AMSG’s recent contract win with a leading Japanese multinational automotive manufacturer.
AMSG’s senior management team, led by MD Greg O’Brien, will all remain with the business to integrate the company with Pinnacle over the next 12 months, although founder and CEO Adrian Cresswell is retiring.
Neil Fergus, managing director of FM at Pinnacle, added: “Pinnacle’s clients and customers will benefit greatly from this acquisition. Our wider geographical spread, broader FM service scope and ability to seamlessly integrate service provision across more FM sectors will ensure that Pinnacle remains top of its game. The technical expertise that AMSG will bring will ensure that we continue to innovate in terms of our service models.”
In October, Pinnacle announced that it had acquired residential and social housing specialists Orchard & Shipman, expanding its homes business nationwide.
FINANCIAL RESULTS
SODEXO’S UK FM BUSINESS RESILIENT DURING PANDEMIC
Sodexo UK & Ireland has had a “strong year and some significant successes” despite still trading below pre-pandemic levels, the company has stated.
Reporting its fiscal results for 2021, Sodexo said that overall, the group had performed bett er than expected over the period. It added that the UK FM sector remained resilient throughout the pandemic.
On-site Services revenues for the group dropped 6 per cent overall for the year. Sodexo said that the group registered the deepest downturn ever because of the pandemic in the second half of fiscal 2020. However, activity picked up quarter by quarter, reaching 87 per cent of pre-Covid Fiscal 2019 revenues at constant rates, by the fourth quarter.
Overall consolidated revenues were €17.4 billion, down 9.8 per cent year-on-year including a negative net contribution from acquisitions and disposals of 0.2 per cent and a negative currency impact of 4 per cent.
As a consequence, the organic decline was 5.6 per cent, with the combination of a first half down 21.7 per cent, followed by a second half up 18.1 per cent.
Fiscal 2021 underlying operating profit was €578 million, up 1.6 per cent, or 12.4 per cent excluding the currency effect.
Sodexo said that it expects to see revenue growth of between 15 per cent and 18 per cent during 2022.
Sodexo chair and Interim CEO Sophie Bellon said: “Our actions to renegotiate our client contracts, strictly control costs and implement the GET1 efficiency programme are clearly visible in our bett er-than-expected underlying operating profit margin. The stepup in the second half is significant given the traditional 100bps shortf all between the first and second halves.”
sectors. His previous roles include directorlevel positions at Managed Property Services and Premier Technical Services Group.
Bellrock FM allies with Sun European Bellrock Property & Facilities Management, provider of riskfocused workplace and property management, has secured backing from new owner Sun European Partners, LLP to strengthen its growth potential. Sun European is a private investment adviser “focused on defensible businesses in growing markets with tangible improvement opportunities”.
Mitie buys
Rock Power Connections Mitie is strengthening its high-voltage, new connections and electric vehicle (EV) capabilities by acquiring Rock Power Connections Ltd. The move is intended to help Mitie provide new connections to the electric grid, high-voltage asset renewals, and end-to-end electric vehicle-charging infrastructure works for clients.
Compass Group launches skills academy Compass Group UK & Ireland has launched the Compass Group Academy, designed to develop skills in the hospitality industry and focused in particular on supporting young people from disadvantaged areas to build careers in the sector. The academy’s physical and online hub will be based in the West Midlands and will open in 2023. The intention is for the academy to train more than 12,000 employees and other people each year.
EPHFMERA
JAMES GRAY, MANAGING PARTNER AT PROPERTY CONSULTANT CLUTTONS, REMINDS US THAT ACHIEVING NET ZERO REQUIRES A COLLABORATIVE EFFORT
“I have been resisting writing this post since visiting the Cleaning Show for fear of having to accept the fact that maybe I am now finally a dinosaur of the industry, but it seems to me that if you want to stand out in a crowd today, wear a suit!! From the time I u left Fleet station I was very much in the minority. You couldn’t tell the difference between the students going to Farnborough College and the maybe highflyers heading into the City. Hoodies, chinos, trainers and rucksacks seem to be the order of the day.” hrs
JOSEPH ALLEN, ASSOCIATE PROFESSOR AT HARVARD, SHARES A KEY TAKEAWAY FROM HIS INTERVIEW WITH US BROADCASTER CNBC
BARRIE TORBETT, CEO & FOUNDER OF RENASCENCE GROUP LTD, NOTING THAT BEING SUITED AND BOOTED ISN’T A PRIORITY ANYMORE CE
“It’s not ‘diversity’ when the board is all white middle-aged men with the token woman who leads HR (because, you know, that’s the soft female stuff ). It’s not ‘diversity’ when your cleaning team is Eastern European and the manager is a white Englishwoman. It’s not ‘diversity’ when this happens in the same company. Wake up, for crikey’s sake. Your business is suff ering because of this lack of diversity; your people are suff ering; communities are suff ering. And apart from all the damn suff ering, it’s wrong.”
SIMONE FENTON-JARVIS, WORKPLACE CONSULTANCY DIRECTOR AT RELOGIX, WEIGHS IN ON THE INCREASINGLY PROMINENT DE&I DEBATE
“We can drive our journey towards “We can drive our journey towards #NetZero by sharing knowledge and #NetZero by sharing knowledge and data, utilising diversity of thoughts in dt tilii di it fth hti finding solutions, changing the culture in the way we create and use our buildings and retraining our current workforce.”
BSRIA BUILDING PERFORMANCE LEAD DR MICHELLE AGHA-HOSSEIN SUMMING UP THE EXPERIENCE OF COP26 AT THE CONSTRUCTION LEADERSHIP COUNCIL
IWFM HEAD OF POLICY SOFIE HOOPER LETS THE COMMUNITY KNOW ABOUT THE WORK NOW BEING DONE BY THE INSTITUTE “Nations know they have to cut emissions deeper and faster. Yet despite a limited increase in ambition, the majority of countries have failed to strengthen the promises they made in Paris in 2015, leading the wellrespected Carbon Action Tracker, to put the world on track for a calamitous 2.4 degrees of warming.”
MOLLY SCOTT CATO, FORMER GREEN MEP AND NOW PROFESSOR OF ECONOMICS AT THE UNIVERSITY OF ROEHAMPTON, SAYS COP26 HAS FAILED
