Leading social housing contractors plan merger
Two of the social housing sector’s biggest contractors are planning to merge.
Keepmoat and Apollo Group, who between them have repairs and maintenance contracts for 60,000 plus homes, are discussing plans to become one organisation.
Both companies would keep their individual identities but they would come under the umbrella of Keepmoat with a head office based in Doncaster - the current base of Keepmoat. The new business will be branded as the ‘Keepmoat family of companies’.
Both are currently owned by investors Cavendish, who bought them in 2010 and have agreed to the merge, and in the last financial year had joint revenues of £1.04 billion, with Keepmoat turning over £682 million and Apollo £367 million.
Chief executives for both companies, David Blunt for Keepmoat and David Sheridan for Apollo, explained the plans to Inside Housing.
Mr Blunt said: ‘Dave [Sheridan] and I have known each other for many years and it [the merger idea] originated in Harrogate this year when we were having a chat thinking about the new world, thinking about Cavendish and we got thinking about being a market leader in the UK.
‘It is a compelling proposition whether you are a customer or a stakeholder and that’s why we are considering it.’
The chief executives denied rumours Apollo was struggling financially, and stressed the move was not a takeover but a chance to create a market leader in community regeneration.
Mr Sheridan said: ‘There is no truth in that, we have never had an issue with our numbers or targets. Our business independently is still strong.
‘The numbers speak for themselves and it merely suits other people to have rumours.’
Mr Blunt said: ‘This is not a takeover, it is a merger. Both are very successful.’
The companies said the merger would allow them to benefit from sharing resources and expertise, and there would be little geographical overlap. Apollo would strengthen Keepmoat’s contracting business in the north, with Keepmoat boosting Apollo’s new build buisness in the south.
Neither wished to comment on the price of the merger or how it might affect current contracts, but said that, if successful, the new company could provide housing associations with a greater level of security, improved service and range of expertise.
Mr Blunt said: ‘Keepmoat has a strong identity in the north and Apollo has a strong brand presence in the south. What we are trying to do is add value not detract it.’
Both men stressed the merger was at a very early stage and said reductions in staff are not expected.
Mr Blunt said: ‘Due to the size [of the merger] we have to go to the Office of Fair Trading to make sure there are no market share issues.
‘Once that is done we will work up a business plan and the timeline is the fourth quarter this year as the earliest we could complete.’
The new company would be headed up by Mr Blunt while Peter Warry, current non-executive chairman of Apollo, would become non-executive chairman.
Mr Sheridan is expected to become a board director in charge of the south of the country.
Allen Hickling, current director of regeneration at Keepmoat, will be responsible for the northern regions while John Thirlwall, current director of finance at Keepmoat will have the same position for the whole group.
Peter Hindley, currently director of homes at Keepmoat will become head of homes for private sale and Tom Allison will remain as chair of Keepmoat until the merger is complete.