GVA Grimley LLP, a leading independent UK commercial property consultancy, has announced that it has secured a £40-million investment from Lloyds TSB Development Capital ("LDC"), the leading mid-market private equity provider, as part of a restructuring that will prepare GVA Grimley for the next stage of its strategic growth.
The restructuring involves GVA Grimley converting from being a limited liability partnership (LLP) into a limited company (Ltd) with effect from 28th November 2007.
As a consequence of this change, GVA Grimley's Equity Partners and in due course Non-Equity Partners, together with a number of other senior employees, will collectively own the majority of the equity in the Company, with LDC becoming a substantial minority shareholder.
Bob Barnett, Chief Executive of GVA Grimley, explains the background: "The current 71 Equity Partners have enjoyed the benefits of over 15 years of sustained growth in income and profits arising from our loyal client base and outstanding people. We have ambitious plans for the future and we now wish to share our equity more widely to include all of our 165 non Equity Partners who will be invited to become shareholders in the new company. We are also delighted that we will be able to grant shares to the leaders of our HR, IT, Facilities, Finance and Marketing teams who have each played their part in helping us achieve our recent success".
"We have successfully expanded by merger and acquisition, with several small but very successful businesses, the most recent being leading regional firms of Lamb & Edge in Newcastle and Osmond Tricks in Bristol."
"We will continue to expand organically and by acquisition and we anticipate that the opportunities that we will have to achieve this growth will be larger than ever before. As an LLP it is difficult for us to acquire large businesses without changing our capital and funding structure. LDC will help facilitate our continued growth and their investment is a testament to the diversity and stability of our business."
"I am delighted to welcome LDC as our first external shareholder. The similarity between our two cultures and our regional structures marks LDC out as an ideal partner for our firm."
In the year to 30 April 2007 GVA Grimley generated total revenues of £148m, of which 67% derived from consultancy services and around 50% was generated by the regional offices outside London.
Bob Barnett reports: "In the first six months of the current financial year the firm's revenues have grown by over 12% from this time last year. Whilst there is uncertainty in some transactional markets especially investment, all our consulting business areas are trading well ahead of budget. We are optimistic about the next 12 months which reflects our consulting and regional strengths."
Tim Farazmand, Managing Director of LDC in London, commented: "The opportunity to invest in a business of this quality does not come along very often. GVA Grimley has a strong consulting base coupled with vibrant investment and transactional teams and we are delighted to be supporting it in its next growth phase. The firm has an outstanding reputation with its clients, the profile of which is second to none, a strong track record of profitable growth and an experienced and successful management team, supported by the massive strength in depth of a 236 partner firm."
"We are confident that GVA Grimley's strong regional offices, growing London presence, broad client base and high proportion of stable consultancy revenue offer an excellent platform for growth. We look forward to working with the enlarged shareholder group to achieve further success."
Steve Halbert, Head of Mergers & Acquisitions at KPMG Corporate Finance, who has advised GVA Grimley throughout, comments: "This is a market leading and very innovative transaction for a Partnership. It reorganises GVA Grimley's capital structure and widens ownership to include all non equity Partners and other senior management. It has taken several months of hard work by the management te