The deal means a partial exit for Forrest’s previous private equity backer, LDC, although Palatine and LDC together now have a combined majority stake in the business.
A result of the deal is that Mears Group chairman Bob Holt, becomes non-executive chairman of Forrest. Mears and Forrest are competitors.
Bolton-based Forrest has seen its turnover grow from £38m in 2007 to more than £100m last year, with sales growing nearly 50% in 2012. It now has an order book worth £1.2bn.
It has expanded from its core business of refurbishing and repairing council houses to take on new build services for social housing landlords. It also has a renewables division that was one of the first registered installers under the government’s Green Deal and Energy Company Obligation (ECO) initiatives.
Palatine partners Gary Tipper and Ed Fazakerley also join the Forrest board as non-executive directors, alongside Bob Holt.
Day-to-day management remains with chief executive Lee McCarren and managing director Mark Lyons.
Ed Fazakerley said: “Forrest is one of the leading social housing contractors in the North West and has shown impressive growth, both in turnover and profit, under the management of Lee McCarren, Mark Lyons and the management team.
“Management has succeeded in broadening the business offering in order to capitalise on the significant new-build and renewables opportunities that are available in the social housing arena. We are looking forward to working closely with Lee and the management team to exploit these growth opportunities.”
Lee McCarren said: “LDC, led by Jonathan Bell, have been a hugely supportive partner for the business over the past six years. With Palatine alongside us as an additional investor, we can continue to drive improvements in the quality of our customer service offering, as well as developing more new and complementary service lines. This on-going strategy has been the key to our many consecutive years’ growth and to our strong, long-term customer relationships.”
RBS and Santander Structured Finance have provided senior debt and working capital facilities of £26m.