Target Information

AFI Group, commonly known as AFI, is a premier powered access specialist operating in the UK and the Middle East. The company specializes in machine rental and sales, complemented by a range of industry-accredited training and health & safety courses. AFI has built a strong reputation for its commitment to quality and customer service since its inception.

Since Rutland Partners' initial investment in May 2013, AFI has experienced significant transformation and growth. The company was acquired in a complex business combination deal valued at approximately £85 million. Under Rutland's stewardship, AFI has pursued several bolt-on acquisitions, expanded its depot network in the UK and Middle East, and broadened its service offerings, leading to a remarkable increase in revenue from around £50 million at the time of acquisition to over £100 million today.

Industry Overview

The powered access rental industry in both the UK and Middle East has witnessed robust growth over the past decade. Contributing factors include increased construction activities and heightened demand for safe equipment solutions amidst stringent safety regulations. The market has shown resilience, even amidst economic fluctuations, due to its essential service nature within the construction and maintenance sectors.

In the UK, the emphasis on infrastructure improvements and construction projects has spurred growth in the powered access sector. Government initiatives focusing on enhancing urban infrastructure have led to a steady increase in demand for powered access equipment. Additionally, with evolving safety standards, businesses are increasingly looking to hire rather than purchase equipment, further benefiting the rental market.

Similarly, the Middle East has been experiencing significant investment in construction and real estate development. With ongoing projects such as Expo 2020 in Dubai and various infrastructure developments across the region, the demand for powered access solutions has peaked. Furthermore, businesses in the area are investing in safety training and certification, recognizing the importance of skilled labor in operating these advanced machinery solutions.

Rationale Behind the Deal

The recent sale of AFI Group to its management team, led by CEO David McNicholas, and Chairman David Shipman, marks a strategic exit for Rutland Partners. The transaction, which also includes the acquisition of Facelift, a well-established powered access rental business, showcases the successful culmination of Rutland's investment strategy focusing on growth and value creation.

This deal not only delivers a successful exit for Rutland, with the transaction value close to £160 million, but also positions AFI for further growth under the leadership of its experienced management team. The transition reflects a continuous cycle of investment and reinvestment within the sector, demonstrating confidence in the future trajectory of the powered access industry.

Information About the Investor

Rutland Partners is a private equity firm that specializes in investing in mid-market companies across various sectors, including business services, healthcare, and specialized manufacturing. With a focus on transformative growth strategies, Rutland has established a robust portfolio and a reputation for building companies that deliver long-term value creation.

During its investment tenure with AFI, Rutland provided critical support in scaling the business and navigating complex market dynamics. Their strategic approach and sector expertise have facilitated AFI’s growth journey, allowing the company to double its revenue and expand its geographic footprint throughout its partnership.

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The sale of AFI Group represents a significant achievement for Rutland Partners, marking the conclusion of their investment in Rutland Fund II. From an investment perspective, the strategic exit not only reflects positively on Rutland's capabilities in fostering growth but also demonstrates a successful alignment of interests with AFI's management team.

Given AFI's substantial revenue growth and its position as a leader in the powered access market, this deal appears to be a favorable investment. The management buyout enables a smooth transition that allows AFI to continue its trajectory of expansion with familiar leadership at the helm, which can instill confidence among stakeholders and employees.

Furthermore, the inclusion of new funding from Pricoa Private Capital reinforces AFI's financial position, enabling the company to pursue further growth opportunities post-acquisition. This strong financial backing, combined with a robust operational foundation, suggests that AFI is poised for continued success in the evolving market landscape.

Overall, this transaction highlights the effectiveness of private equity in facilitating business growth and reflects a positive outlook for both AFI and its new investors. The investment strategy exemplified by Rutland Partners showcases the potential for value creation through strategic support and transformational growth.

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