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AT THE


HEART OF HIRE


B R A N D O N ’ S “ I D E A L ” O W N E R


While it was always inevitable that Brandon Hire would ultimately be sold, given its ownership by a private investment company, the announcement on 8 November (the day before we went to press for this issue) that it had been acquired by Vp still came as a surprise - not least because strong rumours had been circulating around the industry in the days beforehand suggesting another business being the suitor. In this regard, it was one of the best kept secrets in the industry.


In our Profile article on Brandon exactly three years ago in our November/December 2014 issue, we said that a change of ownership at some time was inevitable, as Brandon had been sold by Wolseley plc (now Ferguson plc) in August 2010 to Rutland Partners LLP, as well as Brandon’s senior management which held 20%. We also mentioned that, while such investment businesses typically own an acquired company for five years before trying to realise their return, the management was focused on strengthening the Brandon operation and the brand. That article quoted Brandon’s MD Tim Smith, saying that “any new investor will have to be as passionate about the business as we are.”


After the Vp deal, Tim Smith said: “From the outset, Rutland has been a supportive investor in Brandon Hire and was my first choice backer as we separated from Wolseley plc. A stable shareholding has allowed us to grow a successful equipment hire business, with an SME focus. This has given us a competitive edge and a point of difference. We’ve been able to build real customer loyalty by developing a great local branch network that's run by staff who genuinely care about what they do. I feel proud of what we have achieved together. Looking to the future, Vp is the ideal new owner to allow the company to continue to grow and thrive.”


INCREASED MARKET PRESENCE


Rutland Partners states that the disposal realises a return of 2.6x its original investment of c.£32m. Vp believes it is an excellent acquisition, dovetailing with its own tool hire business, Hire Station. As Brandon operates from 143 locations and Hire Station has 58 outlets, this will significantly increase Vp’s presence in the market. In addition, the respective customer bases of the two operations complement each other to a large extent, with Brandon’s clients


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typically comprising tradesmen and small to medium sized enterprises (SMEs) operating in their local markets, while Vp has a strong presence with larger, national organisations.


Time will tell what the exact implications of combining the two operations will be. Neil Stothard, Vp’s Chief Executive, told EHN that the intention is to retain all Brandon staff, and to retain the Brandon brand, while also not wanting to lose the Hire Station name that has been established, so it will be interesting to see how this develops in the future. Certainly, a number of industry watchers that EHN spoke to regard the deal as a very good one for both parties, with the operations overall being an excellent fit.


LOOKING AHEAD


Looking from a wider perspective, what might the acquisition mean for our industry? One obvious outcome is that it sees further consolidation in the market and the combination of two Top Ten national hire operations. It will be interesting to see whether the sum of the parts eventually gives an operation with a larger reach and takes market share, or whether the overall customer base will remain much as before for other hirers to serve.


Another consideration, however, is that the deal means Brandon will be owned and managed by an organisation that is solidly focused on tool hire, rather than by owners with no direct experience of the industry. In this regard, the outcome is similar to that following the other significant acquisition this year when Netherlands-based tool and plant hirer, Boels Rental, bought Supply UK Group in April.


This should give stability and a platform for growth, as well as conveying a positive message about our industry’s potential and future prospects.


Indeed, with concerns being expressed by some commentators and analysts about the possible impact of a range of factors, such as the potential impact on consumer confidence of the recent rise in interest rates (and perhaps more in the pipeline), and the on-going debate about Brexit negotiations, the Brandon deal should be seen as an endorsement of our industry’s potential as we look ahead to 2018.


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