United Capital has built an acquisition pipeline exceeding £350 million in revenue as the coronavirus pandemic accelerates consolidation across the UK construction sector.
This has come about due to many construction industries feeling the full brunt of COVID-19. With staff needing to down tools but rent and other outgoings still requiring payment, of course it’s not an ideal recipe for any business. That goes double for construction, when the vast majority of work is done on site instead of in offices that can be handled remotely.
Market Downturn Drives Exit Demand
Industry reports suggest construction activity could decline by up to 40% as almost all projects are paused. Government support measures have been criticised as insufficient, with many companies unable to access the loans needed to stay afloat.
United Capital completed the acquisition of McGill last year, formerly one of the top 500 companies in Scotland, after the Scottish firm entered administration, alongside Alliance Electrical, an Angus-based electrical services company. The firm now aims to acquire UK-based building services and facilities management companies with turnover above £100 million.
CEO Says Market Has Shifted
“When we announced our targets in December 2019, we never could have envisaged the current situation,” said Graeme Carling, CEO of United Capital. “We have adapted quickly and are seeing opportunities where they didn’t exist before. Companies that were not considering an exit when we spoke to them earlier in the year are now chasing us, the market has shifted.”
Retirement-Age Owners Seek Exits
Most businesses lack the resources to weather the storm indefinitely, particularly those led by owners nearing or of retirement age. Many had invested everything into their companies over years, only to find themselves short on options due to the pandemic’s impact.
United Capital’s acquisition strategy positions it as a potential lifeline for distressed construction firms, offering an exit route as traditional financing dries up and market conditions worsen across the sector.
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