M Group Services sold to Luxembourg fund

The UK’s ninth-largest contractor has been sold for an undisclosed sum.

M Group Services, which turned over £1.86bn in its 2022/23 financial year, will officially have a new private equity owner in autumn upon completion of the deal between seller PAI Partners and buyer CVC.

The infrastructure contractor has 11,000 staff and carries out work across water, energy, telecoms and transport from more than 216 locations across the UK. It was formed in 2016 from Morrison Utility Services and placed 9th in the CN100 2023.

Paris-headquartered PAI Partners bought the company in 2018 from private equity firm First Reserve.

Since then, M Group has acquired 14 businesses, with revenue increasing from £1bn to “over £2bn today”, according to the contractor – although its accounts for the year ending 31 March have not yet been published.

Luxembourg-headquartered CVC has now bought M Group via its Fund IX, which closed at €26bn (£19.5bn) in 2023, becoming “the largest private equity fund ever raised”, according to M Group.

The value of the sale is undisclosed, but in 2022 Bloomberg reported that PAL Partners was seeking up to £1.5bn for M Group.

In a statement, the contractor said CVC will “work closely with M Group Services’ management team to accelerate its organic growth and development in this next phase, complemented by further strategic value-enhancing mergers and acquisitions”.

M Group Services chief executive Andrew Findlay said: “We would like to thank PAI Partners for their strong support and commitment to our growth since 2018.

“We are delighted that CVC has decided to support our clear and ambitious plan to continue to grow and deliver at pace, built on our solid market-leading foundations. We look forward to working in partnership with CVC to deliver our future plans. This is great for our people, our clients and their customers.”

Dominic Murphy, managing partner and co-head of the UK team at CVC, and Tim Gallico, partner at CVC, said: “M Group Services is a leader in an attractive market growing on the back of structural trends linked to ageing infrastructure, decarbonisation initiatives and technology.”