Tribal Group buys Hacas in £45m deal

Housing consultancy Hacas Chapman Hendy has been bought by public-sector specialist Tribal Group, in a deal valuing the firm at £45.1m, writes Joey Gardiner.

The deal will see Hacas subsumed within a group that has already acquired more than 30 companies in the past three years.

The bid was thrashed out between directors of Tribal and Hacas in a marathon all-night meeting that finally concluded a deal at 5am on Thursday morning.

The offer is dependent on the approval of Hacas shareholders who control 30% of the firm. Under company law 90% of these private shareholders have to vote in favour of the bid otherwise the offer is dropped.

Tribal Group has always headed the list of bidders tipped to buy Hacas, and last month it was revealed it had negotiated a £100m credit facility with its lenders in order to fund acquisitions (HT, 13 June, page 10).

Tribal will pay for Hacas with £30.7m in cash and the rest in Tribal Group shares. Shares in both companies fell on the announcement, with Hacas down 7% to 137.5p by midday trading on Friday, and Tribal down 8% to 317p.

Derek Joseph, managing director of Hacas Chapman Hendy, said his company would keep its staff and the present brand, and that services to customers would be unaffected.

He said: "Our operations will not be interfered with, our consultants will still do the same job with the same customers. However, this now gives us the chance to bid for bigger cross-sector contracts, the kind of thing we haven't been able to bid for before."

He countered concern that the deal would only further Hacas's dominance by sector, saying: "If we're going to provide the range of services our clients want, we have to be this size. People like us to be small but they also want the skills – we can't be all things to all people."

James Tickell, deputy chief executive of the National Housing Federation, said: "We're hoping that [Hacas] will continue very much as a separate entity. [However], the sector will be nervous that the unique character of the business will be lost."

Hector Forsythe, analyst for equity analysts Evolution Beeson Gregory, said Tribal Group had a good track record with its acquisitions: "It doesn't fiddle with the businesses it buys, it doesn't go in and tell them how to run their business."

Tribal Group employs 1500 people in management consultancy, human resources, recruitment, IT outsourcing and public relations for public-sector clients. Strongest in the educational sector, its consultancy business will effectively double the size of Hacas's 150-man operation.

Henry Pitman, chief executive of Tribal Group, told Housing Today he was delighted with the deal: "This is a business we've known for some years and one that fits in extraordinarily well with our own. We are now the leading management consultancy in the public sector."

He added that other regeneration companies were in Tribal's sights for potential acquisition over the year. The £45.1m deal, if it goes through, still leaves the firm with a £50m war chest to fund future purchases.