It’s fair to assume that the majority of readers know the story of how tier-1 contractor Tilbury Douglas shifted away from construction, towards facilities management and became Interserve. And how Interserve narrowly escaped the same fate as its rival Carillion before falling into administration, shrugging off its FM baggage and re-emerging as a construction firm once more called Tilbury Douglas.
Throughout the torrid history of the Interserve brand there remained one constant beacon of stability – the group’s formwork and scaffolding subsidiary, RMD Kwikform.
Although a well-run business and a reliable profit-maker (contributing 32% of group total operating profit in 2015) RMD Kwikform’s specialist scaffolding and formwork business began to look a bit out of place among its parent company’s portfolio of maintenance and outsourcing services.
And so in 2016, in need of some cash, Interserve put RMD Kwikform up for sale before taking it off the market again eight months later having failed to find a suitable buyer. At that time RMD Kwikform was contributing annual profits of more than £40m on £200m turnover. As Interserve plunged into financial crisis, a 2019 restructuring dumped £350m of the group’s £650m debt onto RMD. That year RMD Kwikform saw its revenue dip to £165m and operating profit shrink to £15.9m.
The Interserve saga reached its conclusion last year, first with the disposal of the support services and healthcare business then with a return to the historic construction brands under the Tilbury Douglas name.
And finally, RMD Kwikform found a buyer: the Altrad Group, a very acquisitive French company specialising in scaffolding and related activities. Altrad, founded and run by the dynamic and charismatic entrepreneur Mohed Altrad bought RMD Kwikform for £140 million in October 2021 after months of speculation that both sides had dismissed as rumour.
For RMD Kwikform’s managing director, Mark Pickard, the takeover marked the end of a period of uncertainty. The process of integration with the rest of the Altrad group has so far proved remarkably smooth and has been very well received by employees, he says.
“Of course there’s always some nervousness with a change of owner and new branding. But we’ve already aligned ourselves with the Altrad brand,” he says. Indeed the rebranding has been simple and low-key. There’s no radical re-naming – the company is now called Altrad RMD Kwikform or ARMDK for short – though there is a new red colour palette, shared with the other businesses in the group.
Pickard is careful to point out that RMD Kwikform was in very good health when Altrad bought it out. Despite Interserve’s troubled history, his side of the business never really suffered. “The company that became Interserve always had three distinct elements: construction, service and us.
“There was never any lack of investment,” he says. “Interserve was a very good parent. We were the acknowledged experts in our field and Interserve was always happy to let us grow and willing to invest in RMD.”
In fact, says Pickard, there were no problems at all until the fall-out from the energy-from-waste contracts. These were very complicated, expensive contracts dependent on relatively new and highly complex technology.
Interserve lost hundreds of millions of pounds building waste incinerators to power renewable energy plants and ended up cutting its losses and handing the jobs back to its clients when contract after contract fell behind schedule.
When the sale of RMD was first mooted in 2016, the RMD management knew that Altrad was a likely suitor. The French group had been cherry-picking British companies in the scaffolding and formwork sector for years and RMD was both profitable and perfectly aligned with Altrad’s core business.
“From our perspective we always expected that Altrad would be an interested party,” says Pickard, who admits that he quite liked the idea too: “It would be better than being sold to a financial organisation that would eventually want to sell the business on and get a return on its investment,” he says.
But it wasn’t until last year that Altrad made an offer that RMD and Tilbury Douglas could accept.
“October 2021 now seems like a very long time ago,” says Pickard. And indeed, a lot has happened over the ensuing months: Altrad has made about a dozen acquisitions in the course of the past financial year, in addition to RMD Kwikform.
Altrad’s modus operandi is to take on sound businesses and let them continue to operate at arm’s length. “It’s not a big bang,” says Pickard. “We will remain an autonomous, entrepreneurial business. In no way has Altrad tried to interfere.”
Apart from some changes at the international level – ARMDK’s overseas operations now report to Altrad in France – there have been no major structural changes and no redundancies, says Pickard. “Of course we will have budgets and targets to meet, but otherwise it’s business as usual,” he says.
ARMDK is currently in a 12-month transitionary period as it aligns with the rest of the group. Altrad’s financial year runs to the end of September, so 2022 will be an eight-month year for ARMDK. But already the focus for Pickard is on growth.
“There are plenty of opportunities out there,” he declares. “Infrastructure is the big growth area and we would expect to be successful in these markets.”
That almost goes without saying. RMD Kwikform is a familiar name in civil engineering and the company’s current workload attests to this. “We’re supplying all the HS2 joint ventures – plus something like 40 or 50 HS2 subcontractors too,” Pickard observes. “HS2 is still in its infancy really, so there’s a lot of work still to come.
“We’re also very much involved with Hinkley Point C and we’ve been on Tideway for the past three years. Looking forward, there’s the Lower Thames crossing; and Sizewell C has just got the thumbs-up,” adds Pickard.
The Altrad group structure means that ARMDK will be able to draw on a range of complementary products and resources from its new sister companies. “Altrad allows its group companies to compete against each other and offer best value. But by the same token, they can also come together to make a joint offering,” says Pickard.
Of course this does not mean that ARMDK will rely too much on borrowing other products. Its own product development programme remains very much a priority. “We always look to improve, and innovation is very highly valued at Altrad,” explains Pickard, who fully expects to step up his R&D effort.
An area of particular interest to Pickard is the shoring and ground support sector, a market currently dominated by specialists like Groundforce, Mabey Hire and MGF. This raises the intriguing question of whether or not Altrad had engaged in negotiations with Groundforce parent company VP when the Harrogate-based group put itself up for sale in April this year.
At the time there was speculation – mostly, it should be admitted, on TCI’s Re:Construction podcast – that Altrad would make a move on Groundforce. At the time of writing there is no hint that the two businesses are even talking. However, there are also rumours circulating that either MGF or Mabey could be Altrad’s next acquisition.
Naturally, Pickard has no comment to make on that score beyond confirming that he fully intends to compete directly with Groundforce. But given Altrad’s track-record on UK acquisitions, this is a situation worth keeping your eye on.
Mohed Altrad – the man behind the brand
Mohed Altrad is one of France’s most colourful business figures. The story goes that he was born into a Bedouin tribe in or around March 1948 – the date not known exactly – and was brought up in Raqqa, Syria, by his grandfather.
Although he claims to have taught himself to read, having been forbidden to attend school, Altrad passed his baccalaureate aged 17 and won a scholarship from the Syrian government to study in France.
After obtaining a BSc and then a PhD in computer science at the University of Montpellier, Altrad worked for the Abu Dhabi National Oil Company before buying a scaffolding business in 1985 and founding what would become the Altrad Group.
The group grew rapidly through the acquisition of complementary businesses, although Altrad himself says this was not his original intention: “When I acquired my first company in 1985, I had no plans in mind to build it into a group with an international dimension. I wanted above all to allow the company to develop. But over the years, many steps have been taken and the Altrad group is now extremely solid,” he says.
The UK market has contributed plenty to that solidity, particularly in recent years. British companies that have joined Altrad include Beaver 84, Actavo (formerly Deborah Services), Belle, Generation, Cape Group and NSG.
Even since buying RMD Kwikform, Altrad has continues on the acquisition trail, snapping up Sparrows Offshore in March and Doosan Babcock in May this year. Today, Altrad has 120 subsidiaries in 50 countries worldwide.
Mohed Altrad, now a billionaire in any currency, remains actively in charge of the group. And when he’s not adding to his business portfolio he has other interests to occupy his time: he has written three successful novels and in 2011, despite never having attended a match, bought the debt-ridden Montpellier Herault rugby club, which this year won France’s Top 14 competition in the French National Rugby League.
In 2014 Altrad was made an Officer of the Legion of Honour (the French equivalent of a knighthood) and the following year became the first Frenchman to win the Ernst & Young World Entrepreneur of the Year Award.
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