Pall Mall - Cleaning & Support Services - Jun 2000

Britain's biggest company in the retail cleaning sector has been formed by Pall Mall Support Services Ltd, the London-based cleaning and support services specialist, buying Compass Cleaning Ltd, with headquarters in Grantham. Gresham Trust, the private equity house, is backing the £23m deal.

Following the purchase the enlarged Pall Mall will turnover £75m annually and employ more than 11,000. The company also becomes one of the UK top five in the entire cleaning and support services sector.

Gresham Trust supported a £8.2m management buy-out of Pall Mall three years ago, committing £4m to the acquisition. Gresham Trust is backing the new deal with £8m.

Ryan Robson of Gresham Trust says, "The contract cleaning market is becoming an increasingly professional sector favouring larger companies. The enlarged Pall Mall will be the leading business in the retail market. This is Gresham Trust's fourth investment in five months in support services and demonstrates the success of our approach to this fast growing sector. It is also another example of Gresham Trust supporting an existing portfolio company."

Pall Mall has grown rapidly, servicing 450 UK customers including Nokia, Shell, HSBC, Centrica and Railtrack. Compass Cleaning's retail clients include J Sainsbury, Tesco, Somerfield, and Marks & Spencer. The company is being bought from 3i, which held a 40 per cent stake, and private shareholders.

David Woods, managing director of Pall Mall, says, "Acquiring Compass Cleaning is in line with our strategic aim of becoming the UK's fastest-growing provider of support services. Compass was the ideal choice - the industry sector of its clients perfectly complements ours. We can widen its client base while strengthening our own presence in the very important retail sector and our combined geographical coverage is improved."

Pall Mall will retain the Compass Cleaning name and operate it as a separate division. Paul Elliott, founder of Compass Cleaning, becomes a non-executive director of Pall Mall.