Contractor consolidation heats up

idverde Quadron buy to create £90m UK group.

Quadron: green services contractor purchased by French landscape firm idverde backed by private equity owner - image: © Ross Bliss
Quadron: green services contractor purchased by French landscape firm idverde backed by private equity owner - image: © Ross Bliss

Private equity backers and investors are almost certainly looking for more landscape maintenance contractors to buy, green-space sector experts suggest.

The view follows the purchase of national green services contractor Quadron Services by French landscape company idverde last month. Idverde strategic development director Eric Faivre d'Arcier said the group is now looking to make new acquisitions in the UK and elsewhere in Europe.

On 19 February idverde announced that it had bought the holding company of Quadron from its private shareholders, backed by its own private equity owner Chequers Capital. The move followed idverde's acquisition of The Landscape Group in March last year.

Quadron has 700 staff and a turnover of £30m, bringing idverde's UK turnover up to £90m with 1,600 employees. Across Europe idverde employs more than 4,000 people based at 80 branches and, prior to the acquisition of Quadron, had a turnover of EUR330m.

The acquisition, advised by Livingstone Partners, was "a significant leap forward", said idverde group president Herve Lancon. The group hopes idverde will become the "partner of choice" for public and private sector customers in the UK "just like it is today in France".

Idverde's owner Chequers Capital is one of the oldest private equity investors in Europe and manages around EUR2bn of investments. It focuses on financing mid-size companies with potential for operational improvement as well as regional and international growth.

Quadron managing director Clive Ivil said joining idverde was "the best possible opportunity to build on Quadron's success and take it to the next level". Nick Temple-Heald, chief executive of idverde UK, which trades as The Landscape Group, said the business has always "respected and admired" Quadron for its strong client relationships and innovation in community engagement.

"Our two management teams are looking forward to working together to create even better value for our customers and wonderful career opportunities for all our staff," he added. All the Quadron senior management team will remain in key positions in the newly consolidated structure.

Earlier this year BALI-NCF chairman Phil Jones (HW, 8 January) predicted that 2016 would see further consolidation and fewer grounds maintenance contractors in the public sector overall.

Nextfield parks consultant Peter Wilkinson agreed, saying while he was "initially surprised" at the acquisition, "reflecting on the pressures on the market".

He added: "The combined force of these two big hitters in grounds maintenance contracting will be impressive. As someone who is biased towards companies who really understand parks and landscapes, rather than bins and pavements, I wish them well."

Parks consultant Dr Sid Sullivan suggested that larger skills-based businesses "are better able to withstand the predatory pricing of large generalist businesses". He added: "It has always been the case that there will be fewer and fewer providers of landscape maintenance and management. The market can't deal with too many - there's too much pressure on price."

But Sullivan said it would take six-to-12 months for the Quadron move to prove itself and for idverde to "create the advantage it sees in the acquisition". It will be interesting to see where the synergy arises between the companies, he added.

Meanwhile, Sullivan believes the ready supply of cheap money means there will be more investors circling. "I would be very surprised if there are not other businesses, perhaps equity businesses, looking at the potential, and larger, economies of scale or specialisation and niche marketing of services," he said.

With a small number of businesses sitting on significant cash reserves that would not be earning much money, Sullivan said he is surprised more mergers and takeovers have not already happened. "There are some very high-value landscape management companies out there that would be a snip to buy out - simply because money is cheaper - either to break up or to get the use of their contracts to get a larger business."

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