Business
SPI was an independent operator that installed and maintained heating and electrical systems for social housing.
A market leader in the West Midlands, one of the UK’s larger social housing markets, SPI had over 450 employees and revenue of over £60m.
Market
In partnership with a highly experienced industry CEO, Lyceum Capital researched the social housing services sector, which was seeing long-term growth supported by significant state investment under the UK Government’s “Decent Homes” initiative that ran through to 2010.
Strategy
Having identified SPI as a high-quality platform in the sector, we approached the family owners directly and developed a relationship built on trust, on our knowledge of the sector and on our proposals for the strategic development of the group.
This strategy focussed on:
- Securing the family owners’ succession plan
- Investing in company infrastructure and operational improvement
- Deepening relations with existing customers and securing longer-term service contracts
- Extending the range of services and the group’s geographical reach organically and through acquisition
- Building a long-term secure multi-year order book
Outcomes
Following the acquisition in late 2006, we invested more than £2.5 million in infrastructure and operational improvements, transforming SPI’s IT, procurement and contract management systems.
SPI extended its geographical reach from the West Midlands into Wales and SE England and completed the acquisition of Octopus Electrical Limited in November 2007.
At the time of sale to npower plc (UK subsidiary of RWE AG) in January 2009, the contracted order book had grown from £65 million at acquisition to £116 million with contracts extending out to 2014, and EBITDA had grown in two years from £5.3 million to £7.2 million.