Merger creates UK’s Largest Independent Drainage Firm


Two of the UK’s biggest independent drainage companies have been brought together in a deal which creates a £50 million turnover market-leader in the provision of specialist services to the household, industrial, commercial, transport and water sectors.

The deal sees Solihull-headquartered UK Drainage Network (UKDN), already the largest drainage claims manager in the home insurance market, merge with Waterflow Holdings, a slough-based business which works with clients such as Thames Water, Anglian Water, Network Rail, London Underground, The Highways Agency, Balfour Beatty and other leading contractors.

Waterflow was established in 1965 and specialises in providing CCTV inspection, maintenance, renovation and repair of drains and sewers in safety and time critical environments such as civil engineering projects, construction sites and under-track drainage on the railway network.

The company also leads the sewer renovation market where it has developed a wide variety of innovative no-dig techniques including UV, hot cure and ambient cure lining.

UKDN, which was backed by mid-market investor Lyceum Capital in January 2010, provides claims management, remediation, validation, investigation and repair services for most of the UK’s largest household insurers and has seen turnover grow by 15 per cent during the past year.

The merger will see the enlarged business’ turnover rise to £50 million and it will have a 500-strong team of directly-employed skilled operatives working across its nationwide network of 17 depots.

It will also provide customers with a full range of drainage services, geographic coverage and technical expertise as well as flexible resourcing to respond quickly to requirements of varying size.

Both UKDN and Waterflow have developed a significant presence in the water industry, where demand for inspection, maintenance, renovation and repair services is rising following the Private Sewer Transfer.

The legislation, which came into force on 1st October 2011, has seen responsibility for the repair and maintenance of more than 200,000 km of lateral drains and private sewers move from property owners to the ten Water & Sewerage Companies (WaSCs) in England and Wales.

Waterflow’s senior management team of Philip Robertson, Roger Kern and Mark Lusher will continue to run the business which will be re-branded UKDN Waterflow.

Greg Beech,CEOof UKDN, said: “This is a transformative merger for both businesses, creating an independent market leader with unrivalled geographical reach and a long track record of providing high service levels in demanding markets.

“Waterflow is a robust and well-invested business which has built a strong reputation for delivery, particularly in highly regulated areas such as rail and utilities.

“By merging we are ideally positioned for the 2010-2015 AMP cycle, which will see £22 billion invested in improvements and maintenance of the UK water industry infrastructure, with particular emphasis on protecting and maintaining the UK’s drainage system.

“As well as a being a strong strategic fit, Waterflow is very close to UKDN culturally and has built its reputation on quality of service, professionalism and continual innovation.”

Philip Robertson, Managing Director of Waterflow, said: “With strong financial backers, UKDN has developed the operational infrastructure which will enable existing and new customers to immediately begin to benefit from our increased scale, sector expertise and diverse service lines.

“The combined resource and expertise of the businesses will ensure we can meet growing demand from across our core markets and our ongoing investment plans will ensure we continue to meet their evolving needs.”

Simon Hitchcock, Partner at Lyceum Capital, said: “We invested in UKDN as it is ideally positioned to consolidate a highly fragmented market where legislation and an increasing focus on driving efficiencies through outsourcing is creating new growth opportunities for businesses with the right reach, experience and skills.

“Waterflow is a high-quality business which is a perfect fit for UKDN and is the first of a number of strategic transactions we plan to make over the coming months, providing the enlarged business with even stronger service lines and routes to growth markets.”