CVC Confirms Deal to Acquire UK Street Works Firm M Group

Private equity firm CVC (Fund IX) has this morning confirmed that they’ve acquired UK civil engineering firm M Group Services from PAI Partners. As well as catering for the water, energy and transport sectors, M Group also has a broadband and mobile focused telecoms division via several familiar brands (Avonline Networks, magdalene, Morrison and waldon).

M Group’s telecoms division typically provides a full end-to-end service offering to fixed, private and mobile operators that covers everything from the design, build and maintenance of the telecom infrastructure for key clients like Openreach, Virgin Media, Three UK, Gigaclear, CTIL, Hyperoptic, MBNL and more.

According to today’s announcement, CVC is investing in the business out of Fund IX, its most recent fund that closed at €26 billion in 2023, becoming the largest private equity fund ever raised, and brings substantial experience of investing in and growing UK businesses. Previous reports have valued the deal at around £1.5bn, although today’s announcement doesn’t confirm a specific figure.

CVC said they will work closely with M Group Services’ management team to accelerate its organic growth and development in this next phase, which is expected to be “complemented by further strategic value-enhancing” mergers and acquisitions in the near future. The new owner added that they were committed to upholding the Group’s commitment to safety, client-focused delivery, sustainability and innovation.

Andrew Findlay, CEO of M Group Services, said:

“We would like to thank PAI Partners for their strong support and commitment to our growth since 2018. We are delighted that CVC has decided to support our clear and ambitious plan to continue to grow and deliver at pace, built on our solid market-leading foundations. We look forward to working in partnership with CVC to deliver our future plans. This is great for our people, our clients and their customers.”

Dominic Murphy, Managing Partner and Co-Head of the UK Team at CVC and Tim Gallico (Partner), said:

“M Group Services is a leader in an attractive market growing on the back of structural trends linked to ageing infrastructure, decarbonisation initiatives and technology transitions. We are delighted to support its management team in this exciting next phase of its growth and development.”

According to M Group’s last investor update in November 2023, the company’s order book and bid pipeline were continuing to grow. On 30th September 2023, the order book was £6.7 billion (vs £5.4 billion last year) with a further £400m awaiting signature. This provided visibility for 94% of their FY24 budget revenues (up from 86% a year ago).

The transaction is expected to complete during Q3 2024. Deutsche Bank acted as lead financial adviser to PAI, with Citi also acting as financial adviser. Evercore acted as financial adviser to CVC.