The construction industry has seen a significant increase in merger and acquisition activities just ahead of the recent Budget.
- This activity is driven by concerns over potential capital gains tax changes, prompting companies to act swiftly.
- Several major deals have been announced, including Vinci’s acquisition of FM Conway and United Living’s purchase of PiLON.
- Companies like Fasadgruppen and Nexus Infrastructure are also expanding their market reach through strategic acquisitions.
- These developments signal a potential rebound in the sector, following a period of stagnation.
Merger and acquisition activity in the construction sector is seeing an uptick as companies rush to finalise deals in anticipation of potential capital gains tax increases. The announcement of the Budget has spurred on a flurry of activity, with numerous deals being finalised in a short span of time. This heightened activity is attributed to concerns over retrospective legislation changes that might impact financial outcomes.
One such deal includes Vinci’s acquisition of fellow CN100 contractor FM Conway. This agreement, although still subject to regulatory approval, is expected to be finalised by early 2025. The financial specifics of this deal remain undisclosed. United Living, a company that has significantly climbed the CN100 rankings recently, has also announced the acquisition of PiLON, a firm specialising in social housing property services across London, the South East, and the Midlands. This acquisition is expected to bolster United Living’s existing service capacity and market reach.
Fasadgruppen, a Swedish cladding group, has made its entry into the UK market by acquiring Clear Line, a facade design and installation company. The deal is valued at up to £119.9m. According to Fasadgruppen, the acquisition complements their existing operations by tapping into the fragmented UK market, which is one of the largest in Europe for building envelope work.
Moreover, Nexus Infrastructure has broadened its market spectrum with the acquisition of Coleman, a civil engineering contractor. Valued at up to £5.38m, this acquisition is part of Nexus’s strategy to penetrate sectors of national infrastructure less susceptible to short-term economic variations. MCS has also entered the spotlight by selling an 80 per cent stake to RD Capital Partners. This transaction represents RD Capital’s initial venture into main contracting, aiming to reinforce stability in the ever-volatile construction sector.
This series of strategic acquisitions reveals a clear intention among companies to secure their market positions and expand their operational capacities in preparation for regulatory changes. Such moves are seen by industry experts as a pre-emptive response to expected shifts in the legislative landscape, particularly concerning capital gains tax.
The recent surge in merger and acquisition activity highlights a cautious yet strategic approach by the construction sector to navigate potential tax changes.
