A group of entrepreneurs, led by a former north-east businessman, has launched a £92million fund to invest in support services firms across the UK.
Announcing the launch of Aliter Capital I today, the founders revealed the fund had completed its first equity investment in a deal with the owners of Inverness firm Korrie Mechanical and Plumbing.
Aliter is focusing its activities on small and mid-sized businesses, in a market it says is valued at £300billion in the UK.
The fund is headed by managing partner Billy Allan, the former chief executive of Aberdeen-based logistics firm Asco Group and current chairman of Scottish oil exploration company Bowleven.
Mr Allan is also chairman of Glasgow-headquartered engineering group Edwin James Holdings (EJH), which was the first investment target for Aliter. EJH own mechanical and electrical services company Ingen Technical Services, of which Korrie is a part.
Mr Allan said: “The support services sector is dynamic, with many small and mid-sized businesses performing well in their regions and sub sectors. We believe there is a huge opportunity to find and grow these businesses to create national operators and market leaders.
“We can offer these businesses a powerful combination of equity investment and hands-on experienced operational support, to help them grow and to create value for shareholders that are looking to stay on with their businesses or de-risk their positions through a sale.”
Aliter said its investment, for an undisclosed sum, in EJH, which employs 360 people, represented an “opportunity to grow a regional business into a national provider. The fund added that it had already identified a “pipeline of niche bolt-on acquisition opportunities” to develop EJH’s service lines and expand its customer base.
Mr Allan continued: “EJH is a great example of the sort of business that we are looking to back, a privately held technical support services business that has an effective management team in place but that is looking for strategic leadership to drive transformational growth.
“The business has developed a fantastic reputation in Scotland and we see clear potential to help it expand across the UK, creating a market leading national operator.”
Glasgow-based Aliter said it founders combine a “highly unusual blend” of industrial experience and investment expertise, with a proven track record of building support services businesses over the past 20 years.
The other founders are Greig Brown, former chief executive Europa and Emcor, Andy Galloway, former commercial director at Stiell and Europa and private equity professional Andrew Busby, formerly of H.I.G. Capital and Brookfield.
Making investments of up to £20million in businesses with an enterprise value of £10-50million Aliter said it will help them drive “organic and acquisitive growth.”
