Fieldfisher advises Marlowe plc on £430million sale of division to private equity investor

Fieldfisher has advised AIM-listed business services specialist Marlowe on the sale of its governance, risk and compliance division to private equity investor Inflexion for £430million.

This sale will deliver significant value for shareholders and represents the culmination of Marlowe’s FY24 strategic review focused on generating major shareholder value whilst simplifying the Group’s focus and strategy upon its core Compliance Services businesses, which all deliver largely recurring service revenues in large and attractive regulated markets, with significant scope for future growth.

The £430 million purchase price represents a multiple of 16.2x proforma adjusted cash EBITDA in the year ended 31 March 2023 and, despite the division sold only representing 20% of the Marlowe group's turnover and 40% of its profit, was 121% of Marlowe plc's market capitalisation on signing.

The Fieldfisher team was led by Manchester office managing partner David Bowcock and director Adam Jones with help from Chris Galley, Julia Venckute, Charlotte Round, Andrew Prowse and Keith Woodhouse.

Commenting on the sale, Bowcock said:

"It's been an honour to act on the 25 acquisitions which created the GRC division and now on its sale. Over the last two years higher debt costs and depressed share prices inhibiting equity raises for listed companies have slowed a number of buy and build projects including Marlowe's. This deal will revitalise both Marlowe's retained group and the GRC division.

This sale is a defining moment on what will soon be two value building journeys and I speak for both myself and my Fieldfisher colleagues when I say we are thankful to have played a part in their inceptions and look forward to seeing both progress".

Goldman Sachs (Owain Evans and Khamran Ali) and Cavendish Corporate Finance (Ben Jeynes) acted for Marlowe.

Commenting on the Divestment, Kevin Quinn, Marlowe’s Chairman said in  a statement to the stock market “This divestment represents an excellent outcome for Marlowe and its shareholders and underscores the significant value that has been created through the delivery of our growth strategy. The valuation achieved demonstrates the substantial potential within our business and will reset our capital structure, giving Marlowe strategic agility whilst delivering meaningful returns to our shareholders.

“Following the sale, Marlowe’s business will consist of two market-leading compliance service divisions in Testing, Inspection and Certification and Occupational Health, with a clear and refocused strategy in our core compliance service markets".