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Morrisons owner CD&R hatches £2.5bn swoop on facilities management giants

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The private equity firm which last year swooped to buy the supermarket chain Morrisons is hatching an audacious plan to buy and merge two major players in the international facilities management industry.

Sky News has learnt that Clayton Dubilier & Rice (CD&R) is in talks to buy significant stakes in Atalian Servest and OCS, which between them employ close to 200,000 people around the world.

City sources said the deals could together be valued at approximately £2.5bn, the bulk of which would be accounted for by Atalian Servest.

Combining the two companies would create a global powerhouse in facilities management, an industry in which scale is critical to profitability.

One insider said that the takeovers were not certain to happen, but that CD&R was in detailed talks with both target companies and that it was conceivable that it could reach an agreement with one or both within weeks.

Banks are said to have been approached about providing finance for the deals.

CD&R has an extensive track record at investing in family-owned companies, and has been a prolific backer of companies in the business services sector.

Both Atalian Servest and OCS Group are family-owned, the latter having been founded in the early 20th century by Frederick William Goodcliffe as The New Century Window and General Cleaning Company.

OCS has since grown into an international group employing 68,000 people and serving 20,000 customers in the UK and Ireland, the Middle East and Asia.

Atalian Servest was formed from the £540m takeover in 2018 of Bury St Edmunds-based Servest by its French counterpart.

The two companies undertake work across thousands of sites, including Manchester City’s Etihad stadium as well as hospitals, courts and airports across the UK.

Last year, OCS won a contract to supply security staff to the 2022 Commonwealth Games in Birmingham.

Listed support services companies on the London market include the likes of Mitie Group, which has also grown through significant acquisitions – most notably the purchase of Interserve’s large UK facilities management arm.

Further details of the prospective transactions involving CD&R, including the likely size of its stake in the combined group, were unclear.

The private equity group has become one of the most prominent investors in British companies in recent years, and is now in the process of exploring a sale of Motor Fuel Group, the UK’s biggest independent petrol retailer.

It won a bidding war for Morrisons against Fortress Investment Group, and has previously owned well-known British businesses such as B&M, the discount retailer.

A CD&R spokesperson declined to comment, while neither Atalian Servest nor OCS could be reached for comment.

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