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Oakley Capital invests in TICC platform, Phenna Group

Oakley Capital Investments Limited (OCI) has announced that Oakley Capital Fund V, in which it has a holding is investing in Phenna Group, which OCI describes as a leading platform in the testing, inspection, certification, and compliance (TICC) sector. It comments that TICC is a large, fragmented and growing market driven by favourable trends from increased regulation, greater outsourcing, and exposure to growing end markets. The sector benefits from a resilient business model as testing is typically mandatory, customers are very loyal, and Phenna is highly diversified across different markets and geographies.

In parallel, Oakley Capital Fund V has also acquired CTS Group which will become part of Phenna Group upon completion of both transactions. CTS Group is a leading provider of testing and inspection services in the UK and is focused on the infrastructure market. OCI says that CTS and Phenna Group offer complementary services and that their combined UK wide network of laboratories, site based services and geotechnical expertise will ensure customers benefit from an expanded service offering.

OCI’s indirect contribution, via Fund V, will be around £70m. Fund V is investing in partnership with Phenna Group co-founders Paul Barry (CEO) and David Harrison (CFO) who are reinvesting into the business.

About Phenna Group

Formed in 2018, Phenna is one of the fastest growing TICC groups globally, with revenue growth of circa 100% CAGR over the last three years. The group currently comprises 31 independent businesses which provide specialist TICC services across infrastructure, built environment, niche industrial, pharmaceutical and certification and compliance divisions. The business is diversified operates across 12 countries in four continents.

OCI says that Phenna has emerged as the strategic acquirer of choice for best of breed specialist TICC companies due to its unique partnership approach, which allows leading TICC entrepreneurs to continue to operate their businesses whilst also having all the benefits of being part of a larger global business. Oakley’s investment will allow Phenna to continue to grow rapidly into new verticals and geographies.

About CTS Group

CTS Group is a leading provider of testing, inspection and geoengineering consulting services in the UK and is primarily focussed on long term civil infrastructure projects. The business has more than doubled revenues over the last three years through organic growth and targeted acquisitions. The existing CTS management team will continue to lead the business within the wider group.

The global TICC market

The global TICC market is worth over £200bn and remains highly fragmented with the top 10 groups accounting for only 12% of the market. According to OCI, the market is forecast to grow at over 5% per annum driven by regulatory trends, increased outsourcing, and exposure to growing end markets. Customer demand is typically non-discretionary due to mandatory testing requirements and customers are highly loyal.

Comments from Peter Dubens, Oakley Capital Founder and Managing Partner

“Phenna Group is exactly the kind of entrepreneurial disruptor that Oakley was founded to support. We are pleased to have been able to help them with the acquisition of CTS Group, one of the pre-eminent testing brands serving UK infrastructure customers. We believe Phenna has the potential to become one of the leading TICC groups in the world and look forward to supporting them to achieve that vision.”

Comments from Paul Barry, Phenna Group Founder and CEO

“We were attracted to Oakley’s deep expertise in M&A execution and integration, as well as their strong track record in helping businesses to internationalise at scale. As we look to the future, we’re  excited to be working with them and together delivering on our mission to grow Phenna into a leading global TICC player.”

Comments from Phil Coles, CTS Group CEO

“Oakley’s approach and their track record in driving business growth through M&A complimented that of CTS and our incredible growth story to date. The opportunity that then presented itself to continue this within Phenna, with the immense success that Paul and the team have had to date, was ideal and provides a great future for the business as part of a larger, incredibly ambitious, international group.”

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