Firm acquires West-Midlands-based Purchase Group
Contractor Wates has acquired Wallsall-based social housing contractor Purchase Group in a bid to expand its £70m-turnover responsive maintenance business.
The acquisition of Purchase, which carries out work for social landlords in the East and West Midlands and Wales, will sit within Wates’ £250m turnover Living Space division.
Family-owned Purchase turned over £26m in the year to December 2013, generating £650,000 profit, and has 120 employees. It generates about half its income from responsive maintenance services to social landlords, with the rest being made up of planned maintenance and low-energy retrofit work.
The acquisition comes after Wates chief executive Andrew Davies in September outlined the contractor’s ambition to double revenue to £2bn, with a particular focus on growing the support services part of its business in order to off-set the lower margin and less predictable revenues from contracting.
Wates declined to reveal the value of the acquisition, but Living Space managing director Andy Hobart stressed that it “absolutely was not” a distressed sale, with Purchase Group generating profit in line with the strong performers in the sector.
Hobart said that the firm’s management team including owner-MD David Purchase would come over with the acquisition, reporting in to Wates Living Space’s regional MD for the west, Steve Jackson.
Wates currently only runs response maintenance services in London and the south east following its 2010 purchase of contractor Linbrook. Hobart said this acquisition would allow the firm to offer those services in the Midlands and the North of England. “In this market local referenceability is very important and this brings us that in large swathes of the country. Both companies have a reputation for service quality. On every level this is a platform for growth,” Hobart said.
Purchase’s existing clients include registered providers Asra and Sanctuary.
Hobart said the acquisition had taken a number of months to negotiate and would give Wates an £85m turnover response maintenance business. Family-owned Purchase was founded in the 1920s by builder Frank Purchase.
Andrew Davies, chief executive of Wates, said: “Today’s acquisition brings us even closer to achieving our aspirations of becoming the UK’s leading maintenance business. Our organisations’ combined capabilities and expertise will provide new and existing customers with a quality asset management and maintenance service, with all the added benefits brought by a family-operated company.
“We have strong shared values of integrity, performance and respect, which are built on a long standing family heritage.