Brookfield Business Partners acquires Modulaire Group for $5bn

September 2021 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

September 2021 Issue

In a transaction valued at $5bn, Europe and Asia Pacific’s leading specialist in modular services and infrastructure – the UK-based Modulaire Group – is to be acquired by investment funds managed by Brookfield Business Partners LP.

Under the terms of the agreement, Brookfield – the flagship listed business services and industrials company of Brookfield Asset Management, a leading global alternative asset manager with over $600bn of assets under management – is acquiring Modulaire from its shareholders, which include private equity firm TDR Capital LLP.

Under TDR’s ownership, Modulaire’s experienced management team has strengthened the business through a focus on four strategic objectives of granular management of branch-level performance, continuous efficiency improvement, disciplined capital deployment and a targeted acquisition strategy.

Furthermore, Modulaire is expected to deliver strong continued growth, supported by significant market and secular trends including post-COVID-19 government stimulus programmes, ageing building stock across Europe and a structural shift toward modular space.

The firm is also benefitting from strong environmental, social and governance (ESG) tailwinds as customers look to secure buildings with a smaller carbon footprint and reduced waste and energy consumption through construction.

“I am delighted to welcome Brookfield as a new investor in the business and look forward to benefitting from their sector experience as we continue to drive Modulaire’s growth,” said Mark Higson, chief executive of Modulaire Group. “The significant transformation of our business in recent years is down to the hard work of my colleagues. We are all hugely excited about driving Modulaire’s continued growth in the future and we look forward to the opportunities ahead.”

Following its acquisition by Brookfield, Modulaire’s current management team will remain with the group and continue to focus on driving its strategic growth agenda.

A leader in European modular services and infrastructure, Modulaire Group creates smart spaces for people to live, work and learn. Its business is designed to help customers find the right space solution, no matter what their requirements. The company has operations in 25 countries with approximately 259,000 modular space and portable storage units and 3400 remote accommodation rooms.

“We are delighted that Modulaire will have a strong and experienced partner in Brookfield that will continue to support and invest in the business,” said Gary Lindsay, a partner at TDR Capital LLP. “We believe Brookfield will be a very positive shareholder for Modulaire and look forward to witnessing its continued success in the future.”

Modulaire was advised by Goldman Sachs International, Morgan Stanley, JP Morgan and STJ Advisors, with legal advice from Linklaters LLP.

The transaction is expected to close in Q4 2021, subject to customary regulatory and competition clearances.

“Modulaire has made huge strides as a business over recent years and Brookfield’s investment is testament to the progress that has been made,” concluded Mike Smith, chairman of Modulaire Group. “TDR have given the management team and the business more broadly huge support, helping set Modulaire up for continued growth in the future.”

Fraser Tennant