Investor TrueNorth Capital Group has acquired Leeds-based contractor KNG Building Services as it sets about creating a “construction supergroup”.
Bradley Lay, principal of the private equity firm, said he hoped to complete eight acquisitions in the industry this year ahead of listing on the stock exchange in 2027.
He said he was looking to take full ownership of Hampshire-based envelope firm Regency Facades, where he is currently listed as a director.
KNG is too small to file detailed turnover and profit accounts, but Lay said: “I am looking to set up a number of verticals within TrueNorth.
“We have cladding facades, which will morph into an external envelope group with roofing companies and scaffolding.
“Then there is MEP, where we have acquired KNG and have three others under heads of terms. Very quickly that should [have combined revenues of] £50m to £60m.”
TrueNorth has also outlined plans to build up capabilities in manufacturing and offsite construction.
Lay said each acquired company would keep its own identity and compete for jobs both from main contractors and directly with clients.
“The long-term plan is to list the group on the stock exchange,” he added. “It is a good way to give someone who is looking for an exit some succession planning.”
After 17 years with Essex Services Group, during which the company’s revenue soared from £12m to £150m, Lay believes he has developed the know-how to manage construction finances.
“A lot of the time someone who is very good at their trade has built a company to £10m revenue without necessarily acquiring financial expertise,” he said.
“They don’t have the formalised systems and processes. On acquisition we put those things in place and it allows us to scale.”
He added that the industry was at an exciting point with Building Safety Regulator processes beginning to speed up.
“Last year was very damaging for the sector with so much uncertainty and delays. I can see light at the end of the tunnel. By the time we get to July, August, there will be so much work in the UK.”
Lay wants to grow his construction stable rapidly to take advantage.
“This year we should complete eight acquisitions. There are a lot of companies that like the model and the way I run things,” he added.
“It will get to the point where we will be able to tender for a whole external envelope in a joint package with mechanical and electrical works, which will allow main contractors to de-risk by using one company [for several elements of a project].
“I am looking for businesses of a minimum of £10m revenue – that’s when they’re ready to go to the next level but existing owners feel they’ve hit a ceiling.”
He added: “Business owners often spend decades building exceptional companies but find there are very few genuine long-term ownership solutions available when they start considering their future.
“We aim to provide fair valuations, flexible deal structures and a growth-focused environment where management teams can continue building on the success they’ve already created.”
TrueNorth recently launched SME Funded, a specialist finance platform designed to improve access to funding for construction, manufacturing and other small businesses.
The company has also placed an emphasis on developing talent, creating a design academy to identify and nurture emerging construction professionals through structured training, mentoring and practical experience.
TrueNorth said it was also “investing heavily in technology, leadership development, digital systems and operational excellence across its businesses”.
Lay recently wrote in Construction News about the differences between using pre-tax profit and earnings before interest, taxes, depreciation and amortisation (EBITDA) when valuing companies.