14.02.2006

Lavendon Buys Panther

The Lavendon group, owner of Nationwide Access, Europes largest powered access rental company, has acquired Panther Work Platforms Ltd and its subsidiaries. The company trades under the Panther and Platform Rental brands as Panther Platform Rentals.

The company was ninth in the 2005 Cranes&Access Top 20 UK/Ireland access rental companies, It operates from six locations with 90 staff. At the end of 2005 it operated a fleet of over 1,300 aerial lifts.

The audited accounts for Panther for the year ended 30 June 2005 show revenues of £8.7 million, profit before tax of £1.6 million, gross assets of £13.1 million and net assets of £2.0 million.

The preliminary results for the 12 months ended 31 December 2005 show revenues of £10.4 million and profit before tax of £2.1 million.

Lavendon has paid is £7 million, for the business, £5 million in cash and £2 million covered by the issue of 865,800 new ordinary shares of 1p each in Lavendon.

Additional consideration of between £800,000 and £3.1 million is payable in cash by Lavendon dependent upon Panther’s financial performance over the two years ending on 31 January 2008.

The cash consideration will be funded from the Group’s existing bank facilities. As part of the transaction, Lavendon will assume Panther’s net debt of £10.3 million.

The company will initially operate as separate brand within the Lavendon group although the company says that it will take immediate steps to “maximise asset sharing opportunities”

Lavendon’s chief executive, Kevin Appleton said, “The acquisition of Panther will further strengthen our position as the leading choice for the supply of powered access equipment within the UK.

Our existing UK brand, Nationwide, has tended to be seen as a specialist for supplying larger construction projects and services customers, often operating throughout the UK.

Panther, on the other hand, has built up some tremendous customer relationships in the regions around their depots, and are less exposed to the construction sector than Nationwide.

By building on the complementary strengths and customer base of both businesses we can offer more services to a greater number of customers. That will mean better choice for our customers and improved returns for our shareholders.”

Panther is largely owned by Richard Miller and Brian Fleckney, joint managing directors.

Richard Miller said, “We believe this is a fantastic move for the customers and staff of Panther. We have developed a strong reputation as a high quality provider of access rental, and entering the Lavendon family strengthens our position as a prominent player in the UK access market.

It also means we have access to resources which are unparalleled in our industry and which can offer tremendous career opportunities for our staff. Both Brian and I really believe in the strategic sense of this move and look forward to being part of a management team which will change the face of our industry”.

Vertikal Comment

With the UK market growing rapidly after the introduction of the new Work At Height Rules, last year Lavendon had a choice of growing organically, by adding units to its fleet at a faster pace than its retirements, or via acquisition.

The Acquisition route offers many advantages, including the fact that this purchase increases its UK fleet by almost 25 percent without adding to UK market capacity.

It also, as Nationwide points out, puts Nationwide back into the local and regional markets. Increasingly Nationwides big company image and systems, while winning national and major account business, lost it market share with smaller regional users.

Panther has performed exceptionally well in this market, thanks to the hands-on approach of its owners and their careful selection of branch managers. Often choosing the manager before the location.

The key now is how long Panther remains as a separate entity within the Lavendon group. Will such branding become a long term strategy? or will it eventually be absorbed into the group?

Much will depend on how well Fleckney and Miller "fit" into the Lavendon group. Both are relatively young and still enthusiastic about the industry. Neither were seeking to sell the business, if Lavendon can tap their entreprenurial spirit within the group the separate brand strategy coudl work very well.

The combined fleet of 7,500 units opens up the gap again between it and the growing number of companies with fleets of over 2,000 units.