Upstream - The Newsletter of Incentive FM Group

Jeremy's Point of View

In the outsourcing world, larger companies buying out smaller ones and creating market consolidation is hardly new news, so why is this so interesting or unusual you might ask?

Jeremy Waud, Chairman of Incentive FM GroupIt appears that the level of rationalisation and the nature of the players getting involved has changed – all manner of organisations now feel that they need a bite of the outsourcing and facilities management pie!

Are surveying and FM services now a bundle?

The last twelve months has seen some big and bold moves. We have seen multi service operator Europa swallowed up by the huge German construction and services group Bilfinger. This acquirer then went up the food chain one notch and swallowed up the surveying firm GVA.

In a similarly forthright move, one of the world’s largest surveyors, CBRE, acquired Norland, a well-known and substantial operator in the facilities and maintenance market in the UK. This one has certainly caused some controversy amongst our surveying client community. The answer to my question would appear to be that surveying and FM services can now be supplied together.

What about property owners wanting to be FM providers?

For many years, Lend Lease has been a substantial player in construction and property management, most famously at Bluewater. They have had a facilities management business operating in both the public and private sectors for some years and recently decided to divest into better return areas and sold their FM business to Cofely.

Cofely, the UK facilities trading brand of GDF Suez of France, had previously also bought the substantial FM business from
construction giant Balfour Beatty. Whilst one property owner developer is selling out, another is buying in. Brookfield the Canadian owned developer investor that bought Hammerson’s London office investment portfolio a few years back and most recently bought Canary Wharf, has bought the balance of the Johnson Controls facilities management businesses in Canada and Australia to add to its US and Middle East interests, and has stated a desire to be a world player in this sector. Brookfield is already one of the largest property owners in the USA and has 340 million ft2 under its control. This move seems to recognise the opportunity of providing more direct services to its tenants.

More foreign investors

The huge US service group ABM recently bought out the London based cleaning and multi service business of GBM, although it is too soon to see what impact this will have on either company’s fortunes. Servest, the South African owned service group has had a healthy appetite for expansion from a small to large business in the UK as it has swallowed up cleaning, security, catering and maintenance businesses in its quest to enter the crowded and competitive ‘premiere league’ of service providers in the UK. Finally and most recently the Danish listed ISS has acquired the business of GS Hall, the well known M&E and maintenance business, enhancing their technical capabilities away from a more soft services focused group.

Where does this leave Incentive?

We continue to sit comfortably in our midtier position in the UK facilities management and service delivery sector. Strangely enough this is not a crowded space and our customers can and should expect to receive very attentive service from us as we have the time, skill and resources to provide this more customer and staff focused service to them. We are now a £50m turnover business with 2,000 staff on our payroll. We are continuing along our planned path of expansion by both organic and acquisition routes. We are currently exploring technical maintenance and M&E operations to bolt onto our group, such that we have even greater strength in depth and a wider customer proposition. If we are successful with this plan our acceleration to £75m and possibly £100m sales in the years ahead will be somewhat quicker.

Whatever the future holds for our business, we are adamant that we should continue to deliver the lively, friendly and
attentive service that has made us the approachable business that we still are after our first thirteen years of successful
trading. Whether its security, cleaning, consultancy, maintenance or facilities management - we don’t just want to be the company that clients want to do business with, we also want to be the company that the best staff in the market want to work for.


Jeremy Waud
Incentive FM Group