Aberdeen Murray Johnstone Private Equity (AMJPE) has sold its majority stake in John Kennedy, the utility service contractor, to Balfour Beatty in a deal worth GBP43 million. The acquisition will strengthen the engineering and construction company’s position in infrastructure services and provide AMJPE with a cash on cash return of three times its original investment, or an annual IRR of 35%. The management team backed by AMJPE will stay in place.
AMJPE acquired the company in an institutional buyout in September 1997, committing GBP8 million to the deal. The Royal Bank of Scotland provided senior debt of GBP10 million. In June 2000, AMJPE invested a further GBP2.1 million to support John Kennedy’s acquisition of Pipeline Consultants. Under AMJPE’s ownership, the company’s profits have grown and turnover has almost tripled. The number of employees has also increased three-fold to approximately 1,200.
Gary Tipper, a director of AMJPE and board member of John Kennedy, said, “This is a classic example of how private equity can meet the demands of vendor shareholders and the aims of management teams that want to develop their business to the next stage. When we acquired John Kennedy in 1997 we were able to meet the vendors’ aspirations, as they were able to sell the business without having to open their books to direct competitors. Our support allowed the experienced management team to grow the business both organically and by acquisition so that it now has clients all over the UK.”