Management buy-out at Building and Property

Pell Frischmann Facilities Management has agreed with Amec to sell off Building and Property Management Services for œ84.6 million to a management buyout financed by CVC Capital Partners. The present executive board of directors is expected to continue running the company with some new appointments from CVC.

Building and Property was formed as a 50/50 joint venture by Pell Frischmann and Amec in September 1993, when the two companies bought the Property Services Agency's Building Management South East and South and West businesses for just œ10.4 million.

Pell Frischmann, which will receive proceeds of around œ37.2 million from the disposal, described itself as a reluctant seller. Richard Frischmann, managing director of Pell Frischmann Facilities Management, explained: "I should stress that it was a very happy joint venture and we worked well together. The problem was that Amec wanted to grow Matthew Hall Facilities Management and we were competing with them. We knew a lot about Amec and they about us and while buying them out was a possibility, it was decided that a clean break was the best way to sort out the problem."

Frischmann admits the sale of the œ350 million turnover company will dent the group's business. Frischmann said that the group remained committed to facilities management work in the engineering sector, but that profits from the disposal are likely to be reinvested in PFI projects. Frischmann believes that the relationship with Amec will remain close.

The sale of the five PSA Building Management divisions attracted considerable controversy at the time. Bidders were reluctant to put up too much money because of the lack of track record and insecure workload. The Government was forced to put up œ136 million to cover the cost of redundancies over five years.