04.03.2008

Platform goes to Lavendon

The Lavendon Group, the world’s largest specialist powered access rental company has agreed a deal to acquire The Platform Company the UK’s second largest powered access rental company in the Cranes&Access UK/Ireland Top 30 access rental companies 2007.

Lavendon has paid £46.1 millionl, part cash and part shares with £18 million in cash and 2 million shares on completion, £3 million in cash and 885,000 shares after a year, a further £2.5 million and 885,000 shares after two years and £4.1 million in cash on the third anniversary of completion. Lavendon will also assume up to £33 million in debt, making the deal worth at least £79.1 million.

The Platform Company had revenues last year of £31 million with a pre-tax profit of £5.9 million.

Given its size it is subject to shareholder approval which will take at least 21 days so completion will be towards the end of the month assuming the deal is approved.

The deal will take the group's UK fleet up to well over 15,000 units
with revenues approaching £140 million.

The Platform Company’s roots lie with industrial services company MITIE which decided to enter the powered access market in the late 1990’s and invested heavily to build up a national presence. By late 2000 rates were dropping fast reflecting the fact that capacity had grown faster than demand combined with a sluggish construction market.

By 2002 the company realised that powered access was simply too capital intensive in comparison to its other businesses and sold the business through a Management Buy Out by Grant Woodward and Lee Perry and other senior managers. The transaction was completed on February 12th 2002, the birth date of The Platform Company.
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Lee Perry (L) and Grant Woodward of The Platform Company

The company has gone from strength to strength and today boasts a fleet of over 4,200 aerial lifts and 220 telescopic handlers. Operating from 10 locations with 235 employees.

The aerial lift fleet is heavily orientated towards Genie products as is Nationwide, while the telehandler fleet is all JCB.

Lee Perry sales & marketing director at The Platform Company, said, “This is an excellent opportunity for both the employees and customers of The Platform Company. Becoming part of the Lavendon Group will offer so many advantages and this really is a very exciting prospect for everyone involved."

"We have strived, over the past nine years, to build a strong and well-run business, which offers quality equipment with quality service, and a reputation to match and now we have the backing and experience of Lavendon to call upon. I am sure the business and the people within it will continue to go from strength to strength.”

Andy Wright chief executive of Lavendon Access Services (Lavendon UK) added: “The Platform Company is renowned in the marketplace as a quality and customer focused company and is highly respected within the industry. It employs a great team of people and we see its addition as being excellent news for the Lavendon Group and all of its companies”.

In other news Lavendon announced that its full year 2007 revenues increased by 49 percent to £188 million with pre tax profits up 178 percent to £21.4 million.

Vertikal Comment

While this deal was rumoured for several months it seemed unlikely given that Lavendon had only recently completed the major acquisition of DK rental and given that it already has a substantial share of the UK market with a fleet that is larger than the second, third and fourth largest companies combined and almost three times the size of the second largest company.

Lavendon seemed to have a solid strategy with the major national rental company – Nationwide catering to large national contractors that look for a standardised product and service throughout the UK and its collection of high quality regional companies that offer a more personalised service with more specialised products and strong local affiliations managed by the founding entrepreneurs.

Lavendon has said that the Platform Company will continue to be managed separately in the short term, benefiting from a pooled fleet with Nationwide Access. The aim will be to eventually merge the two and benefit from saved overheads and other synergies.

The Platform Company is a national business with over 4,200 aerial lifts and a rapidly growing telehandler fleet that has managed to retain a similar personal approach as that offered by Lavendon’s regional businesses, now coming together under the Panther banner.

What this deal does do is help consolidate the UK’s aerial lift rental market by removing another major player, while boosting Lavendon UK’s fleet and revenues. Lavendon will also gain several first class senior managers in Lee Perry Grant Woodward and their immediate team along with one of the most respected company’s in the business.

The deal could certainly help maintain rental rates at a time when there were some early signs of softening. The company’s competitors from AFI down to smaller regional companies will all be rubbing their hands today to see one less competitor on the scene.

The longer term benefits to Lavendon will depend on its ability to retain the key staff and maintain their positive attitude. The choice of name following the integration of the two businesses will of course also be a key decision.

Watch this space.