Charity trading subsidiary’s first acquisition hailed as ‘significant’ for sector
Charity trading subsidiary’s first acquisition hailed as ‘significant’ for sector.
The first acquisition by the trading arm of mental health charity Gofal has been hailed as a “significant statement within the sector”.
Gofal Enterprise Ltd (GEL) has bought Caerphilly-based cleaning firm APP UK, for an undisclosed figure.
APP UK was established in 1983 by Julie Nobes, who will remain with the business as it scales up its commercial cleaning and maintenance services.
She said: “This is an exciting time for APP UK. We are looking forward to working together with GEL to create a company that excels in the service sector, creating a unique customer experience.”
The acquisition is a first for GEL, which was set up in 2010 to develop and operate a portfolio of socially responsible businesses that invest profits back into the charity.
GEL is targeting a £1.8 million turnover for 2016/2017 which will be achieved through continued organic growth and its acquisition strategy.
The acquisition of APP UK complements GEL’s existing social business, PS Facilities Management, which provides cleaning, building and maintenance services to organisations across south Wales, including Flexicare Medical Services, Celtic Horizons, Valleys 2 Coast, Trakcel, and DVS Ltd.
The move comes after GEL announced its plans last year to undertake a series of acquisitions to strengthen its position in the market and generate alternative income streams for Gofal.
Matthew Cole, Director of business development at Gofal, welcomed the industry-leading move.
He said: “We are delighted that Gofal Enterprise Ltd has been able to take this exciting step forward in acquiring APP UK.
“We feel that this is a confident move in the right direction for GEL and welcome the opportunity to work alongside Julie, who has established a great business in APP over the last thirty years.
“We recognise the need to think differently and creatively about the way we generate income for Gofal and this acquisition not only strengthens GEL’s current offering but will help to generate much-needed funds for Gofal, in what is a challenging economic environment for the sector.
“With the aim of leading social enterprise innovation in Wales by running a portfolio of socially profitable businesses, this is the first of a series of acquisitions that we aim to complete over the coming months.”
The acquisition also provided ‘firsts’ for GEL’s funding partners - Finance Wales and Social Investment Cymru (SIC) at Wales Council For Voluntary Action (WCVA).
For Finance Wales it is the first time the investment company has funded a charity acquisition, whilst for SIC it is the first time funding a buy-out on this scale.
Matt Brown Head of Social Investment Cymru at WCVA, said: “For the third sector this sends a very strong message. Buying a commercial organisation is a rare occurrence. It’s a real statement of intent of what a social enterprise can become.
“The scale it will give GEL will mean that it is now a major player in the market place.
“There are very few social enterprises of this scale in Wales. Whilst they do exist they are few and far between so this is a really significant statement for the sector.”
Steve Galvin, of Finance Wales, welcomed the opportunity to work with both GEL and Social Investment Cymru.
He said: “We are very impressed with the vision of GEL and are happy to support its ongoing plans for more acquisitions.
“We are confident that Matt and the GEL team can build a sustainable social business which fits with Finance Wales’ corporate social responsibilities.
“We also welcome the opportunity to work jointly with Social Investment Cymru at WCVA on what has been a first for all parties.”
GEL was advised by Nigel Greenaway of leading corporate law firm Greenaway Scott and Richard Coppock of RCA Corporate Finance.