Noonan Services sold in €90m management buyout
NOONAN SERVICES, the contract cleaning and facilities management group, has been sold in a management buyout (MBO)backed by Alchemy Partners, a British private equity company.
The deal is valued at more than €90 million and the main beneficiaries are the company's founder Noel Noonan and six other members of his family.
Mr Noonan and the company's chief executive, Pete Smyth, Mr Noonan's son-in-law, are leaving the business following the conclusion of the deal, which was signed on Wednesday.
Staff and clients were informed of the transaction this week.
Noonan provides cleaning services and products, security, grounds maintenance, pest control and water coolers to clients in the public and private sectors.
The company, which was established by Mr Noonan in 1977, has an annual turnover of more than €100 million and 5,500 staff. Noonan Services made a pretax profit of €4.3 million from a turnover of €103 million in 2006.
Alchemy is buying most of the shareholding in the company with a group of eight senior managers taking a small stake in the business. The firm's director of operations John O'Donoghue will replace Mr Smyth as interim chief executive. Mr O'Donoghue said the management was "excited" about working with Alchemy.
Mr Smyth, who previously worked for US investment bank Lehman Brothers, joined the business five years ago and managed the company through four years of significant expansion through acquisitions and organic growth.
He said the most significant acquisition was the purchase of the Surrey-based Footprint Cleaning Contractors in 2004.
The deal brought Noonan into the UK market for the first time. Less than 10 per cent of the group's business is in the UK.
Mr Smyth said the company had sought "an external investor" following a review of the business conducted earlier this year.
NCB Corporate Finance advised the company on the sale process.
There has been much consolidation in the cleaning and facilities management sector in recent years as companies have bought or merged with rivals to gain a stronger foothold in the market.
Mr Smyth said: "We have been active in the consolidation and the strategy is to grow further through acquisition and organic growth.
"Alchemy is an ideal investor to back the management team."
Irish businessman Gavin Loughrey, a partner at Alchemy, managed the transaction for the British company. Alchemy's founder and managing partner, Jon Moulton, a prominent figure in the UK private equity sector, described Noonan Services Group as "a large, highly successful company with a very good record".
Mr Moulton said there was "less penetration" of cleaning and facilities management groups in Ireland than in many other markets.
Noonan offered more opportunities for growth than similar companies in other countries, he said.
Aramark Ireland, the US-owned company which owns Campbell Catering and employs 4,100 staff, had been in talks to buy Noonan.
Aramark has been pushing for further expansion into the facilities management sector.
Mr Moulton said Alchemy had been involved in a number of deals in Ireland in recent years.
"We want to clean up in the Irish market," he said.
Alchemy backed the €70 million MBO of fashion chain a|wear from Brown Thomas last year. The firm also contributed $88 million to the $393 million deal to take private Barry O'Callaghan's e-learning group Riverdeep from the Irish Stock Exchange in 2003.