GVA has been split from its parent company Apleona by its owner EQT.
As a result of the change, GVA will continue to focus on real estate advisory services, including property management consultancy, while Apleona will focus on facilities management in the UK.
The GVA management will report directly to EQT as a result, which is designed to encourage smoother and quicker decision making and a new governance structure is to be put in place. Andy Mottram, a former JLL EMEA board member, has been appointed as chairman of GVA and will be an intermediary between GVA and EQT.
GVA’s detachment from Apleona makes it a neater proposition for any future buyer, as and when EQT looks to recoup its investment in the firm. Discussions were held with Lambert Smith Hampton last year over a corporate deal, although it is understood talks are not currently live.
“People will speculate about us being up for sale as we are owned by private equity,” said Gerry Hughes, GVA chief executive. “Private equity will exit at a point and nothing changes in that respect. We are working towards fulfilling our potential as a business. It is not the intention for the business to change hands in short to medium term, but who knows? I can’t speculate on what will happen. That is no different now though [with the new structure] to what it was before.”
EQT bought the property division of Bilfinger, which included GVA, in 2016 for €1.2bn. This business was then branded Apleona and GVA had until now been an Apleona company.
Andreas Aschenbrenner, partner at EQT, said: “We are pleased with GVA’s progress since we acquired it. This provides a solid platform to drive the business forward and the separation from Apleona reflects this potential.”
The separation of the transactional and advisory business and the property and facilities management business is in contrast to the trend of integrating such segments as has been seen at the likes of CBRE, JLL and Cushman & Wakefield.
However, according to Hughes, the business was not looking to create such sheer scale that those rivals rely upon to have successful FM businesses and that such functions felt too far removed from GVA’s core focus.
“We’re very much focused on driving a business that is seeking to differentiate ourselves in the marketplace by offering the sort of strategic advice to our clients that requires people to have creative thinking and problem solving capabilities and to sit at the top table with public or private sector clients, not only solving problems for them but identifying them for them,” said Hughes.
“That is a long way from a blue collar worker changing the toilet roll. We’re not in that place and we’re not following the herd… It’s for others to speak as to whether it is credible for them but for us it isn’t credible.”
We are working towards fulfilling our potential as a business. It is not the intention for the business to change hands in the short to medium term, but who knows?
GVA employs 1,500 staff across 12 UK offices and last year recruited 25 directors and senior directors with another 18 already committed to joint this year. However, Hughes added that there was some restructuring ongoing across the business that has and will see a “not significant” number of staff leave.
“We’re refreshing parts of our business, and some people are going as we have had to change our business from one that was very partnership orientated to one that is much more corporate and commercial,” said Hughes.
“Those that are leaving are from different parts of the business. Some are retiring and some are going into consultancy. We are bringing the next generation of people through to leadership positions and I’m accelerating a transformation that probably needed to happen a lot of years ago.”
GVA’s financial figures for 2017 are currently not available, but Hughes said that the company “had another strong year operationally and financially” and that he would look to the residential investment, infrastructure and healthcare markets to grow the business further in 2018.
GVA’s €200m debt weight
A new holding entity for the GVA business was registered in the UK by EQT subsequent to the purchase of Bilfinger’s property divisions in 2016, of which GVA was part, called Apleona Limited.
The company’s latest available accounts for the year to 31 December 2016 show the business has had €200m of debt stapled to it, chargeable at 5.25% or €10.5m per annum.
Based upon a revenue of £165m and a margin of 15% this would be equivalent to consuming 37.4% of profits.
The debt also likely means that the price for any future sale of the business would need to exceed the debt figure. Bilfinger is also entitled to 49% of the sales proceeds of any deal for GVA as part of an agreement struck when the sale to EQT was agreed.
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