Palatine has successfully exited its investment in CTS Group, the fast-growing provider of testing, inspection and geoengineering consulting services to the construction and infrastructure sectors.
Leicestershire-headquartered CTS has been acquired by Oakley Capital, the pan-European private equity investor.
Palatine made a partial exit from the business in 2021, with the sale of its insurance claims management division to HomeServe plc for £53m. Together the transactions represent a return of 5.8x for Palatine’s investors.
Since its initial investment in 2018, Palatine has grown CTS into a leading business in the UK. Revenues have more than doubled over the last three years, through Palatine’s investment in digital transformation, talent acquisition and a highly successful buy and build strategy. With Palatine’s backing, CTS has made nine acquisitions adding complementary services and geographic scale to its offering.
CTS has also benefited from Palatine’s approach to ESG strategy, which has seen the business create an in-house ESG coordinator position and realise significant reductions in its carbon footprint through fleet electrification and digitisation initiatives.
Tony Dickin, partner at Palatine, said: “We have enjoyed a highly collaborative, productive and successful partnership with Phil and his team, based on a shared early belief in CTS’ potential to become a nationally-leading force in its market.
“This excellent outcome is a major milestone in what we are sure will continue to be a remarkable growth story for CTS and its new partners.”
In parallel with the acquisition of CTS, Oakley Capital has invested in Phenna Group, a global Testing, Inspection, Certification, and Compliance (“TICC”) sector business. CTS will become part of Phenna Group upon completion of both deals. The existing CTS management team will continue to lead the business within the wider group.
Phil Coles, CEO of CTS Group, said: “Over the last four years of partnership, Palatine has proven itself to be an outstanding and highly supportive investor. Together we have achieved remarkable growth, scaled the business significantly and enhanced our proposition to customers. All of this has paved the way for further long term success as we become part of a larger, ambitious, international group with the backing of Oakley Capital.”
Palatine was advised by Clearwater (corporate finance), Browne Jacobson (legal) and Deloitte (tax).
