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Davis Service Group Plc Business Information, Profile, and History

company services hire godfrey

4 Grosvenor Place
London SW1X 7DL
United Kingdom

Company Perspectives:

The Future: The Davis Service Group seeks to develop and expand the range of products and services provided through a combination of organic and acquisitive growth. This strategy has resulted in the individual group companies having leading positions in their individual markets--primarily in the UK but with an expanding international presence.

History of Davis Service Group Plc

London-based Davis Service Group PLC operates in three primary areas: Textile Maintenance, Tool Hire, and Building Systems. Each division is operated as a more or less autonomous business, with its own board of directors and management, while Davis Service Group, led by Chairman Neil Benson and CEO John Ivey, provides overall direction. Textile Maintenance is the company's largest division, generating half of the company's £470 million in 2000 sales. The division is primarily active in the United Kingdom under operating company Sunlight Services Group, but also has operations in Ireland, Germany (Spring Grove Services), and in France (Modeluxe Linge Services). Sunlight Services is the United Kingdom's leading provider of textile and uniform rental and cleaning services and is also the historical core of Davis Service Group. The company's fast-growing Tool Hire business, HSS Hire Service Group PLC, operates a string of some 400 tool hire shops across the United Kingdom. The company is also active in the United States, with a chain of HSS stores in Florida. In 2001, HSS acquired Denver-based RentX, giving it 74 new stores in 13 states. Davis's Tool Hire division, which also operates hire services for catering and event equipment and materials handling equipment, contributes 29 percent of the company's annual sales. Davis's third division, Building Systems, is active under the name Elliot Group and specializes in prefabricated and modular temporary building rentals and sales for the construction and other industries. This division is also in the process of developing prefabricated housing products for the residential market. Davis Service Group has grown strongly through both organic growth and a series of targeted acquisitions.

Reversing into Services in 1987

Davis Service Group traces its origins through its primary operating companies. The company's textile maintenance division stemmed from Sunlight Services, itself founded in 1900 as a laundry service. Over the course of the century, Sunlight Services developed into a leading provider of textile maintenance and rental services, with an emphasis on uniforms for the hospitality, medical, police and fire services, and other industries. John Ivey was appointed as company CEO and executive deputy chairman in 1973 and began plotting to build Sunlight into one of the United Kingdom's leading services companies. The company expanded beyond cleaning services, adding security services under subsidiary Security Arrangements Group and commercial cleaning services under the Pall Mall Group.

In 1987, Sunlight Services agreed to be acquired for £8 million by publicly listed automobile dealership and rental group Godfrey Davis (Holdings) PLC. That company had been formed in 1920 and had built up a small but highly successful network of luxury automobile dealerships. After going public in 1959, Davis rose to become one of the United Kingdom's leading car dealership and rentals groups. The company also entered into the property market, specializing in the ownership and management of residential park homes under its Godfrey Davis Park Homes subsidiary. Related to this business was the company's Godfrey Davis Portable Buildings subsidiary, which specialized in the rental and sale of portable building structures. In 1981, Davis sold off its automotive rental operations to Europcar, leaving it with its four car dealerships, vehicle leasing business, portable buildings group, and property management activity.

The merger with Sunlight in 1987 turned out to be more of a reverse takeover--Ivey took over the role of CEO and most of the new Godfrey Davis company's executive management and board came from Sunlight. Yet Godfrey Davis provided its name as well as its listing on the London stock exchange, enabling Ivey to raise funds to begin building his services empire.

The Godfrey Davis Park Homes subsidiary was sold off a year after the merger. At the same time, the company made the first of a series of carefully targeted acquisitions, buying up Newbury Laundry Company Limited and expanding its textile maintenance business into the Thames Valley region.

Godfrey Davis, as the company continued to be called, next sold off Sunlight's security subsidiary, exiting that highly competitive market. Instead, the company acquired Falcon Industries, paying £44 million in September 1998. That company was itself composed of three separate businesses, Plantpak and Glenco, both of which were plastics manufacturers, and the Elliot Group. The latter company, originally founded in 1963, had grown into an important designer, manufacturer, and provider of portable and modular building systems. Elliot then absorbed Godfrey Davis Portable Buildings and became the umbrella company for all of the parent company's building systems operations.

In April 1989, Davis sold off the plastics division of the former Falcon Industries as the company narrowed its focus to the services sector. At the same time, the company, through its Pall Mall subsidiary, acquired Tappe Catering Limited. That company was a catering specialist for the Ministry of Defence.

Sunlight Services was boosted in 1989 with the £5.6 million acquisition of Practical Uniform Company, which designed and manufactured uniforms and industrial and protective clothing and equipment. Several months later, the division was boosted again with the purchase of Co-operative Laundry Society. At a price of £11.35 million, the acquisition extended the company's textile maintenance operations into the northeast of England.

In 1991, Godfrey Davis sold off three of its car dealerships (it disposed of the last of its dealerships two years later) in order to concentrate entirely on its growing operations in the services sector. The sale of this business prompted the company to take on a new name, The Davis Service Group. The following year, Davis Service sold off its Godfrey Davis vehicle leasing operation, to the Bank of Scotland, which kept the Godfrey Davis name.

By then, the company had made a new acquisition, of Presco (Holdings) Ltd, which specialized in the manufacture, sale, and rental of portable steel-clad and modular building structures. Presco's operations were added to the Elliot Group in 1991.

A larger acquisition came in May 1993, when Davis acquired the tool hire business of John Mowlem for a price of £53 million. This purchase brought the company into a new area of operation, that of tool hire and equipment rentals, which was renamed as HSS Hire Service Group PLC. HSS, founded in 1957, had been the originator of the tool rental shop in England and, through the end of the century, established a network of more than 400 shops across England featuring a growing array of tools and small plant equipment. HSS began renting catering equipment in 1968, which led the company to form a separate subsidiary for its event hire business in 1980. A more recent addition had been the launch of another subsidiary, dubbed Lift & Shift, which was formed in 1989 to specialize in materials handling equipment rentals.

Focus on Services Group: The New Millennium

Although HSS's growth was in large part organic through the 1990s, its textile maintenance counterpart began the subject of a strong acquisition program. In 1994, Davis acquired Lakeland Pennine Group, primarily active in the northwest of England. The company then moved to focus its textiles business entirely on the cleaning and maintenance site, selling off Practical Uniform Company in 1995.

Less than a year later, Davis became the undisputed leader in the United Kingdom's textile services sector when it paid £136 million to acquire Granada subsidiary Spring Grove Services Limited. That company, which specialized in work clothes for the food and pharmaceuticals industries, but also contained a component for renting washroom towels and doormats, had been founded at the end of World War II and had grown to become one of the top companies in the United Kingdom, with operations in Ireland and Germany as well. Spring Grove had seen a succession of owners at the end of the 1980s and beginning of the 1990s before being acquired by Granada in 1993.

In 1997, Davis narrowed its focus to just three core divisions: Textile Maintenance, Tool Hire, and Building Systems. As part of this restructuring, the company sold off its Pall Mall subsidiary. That company was split into two halves, with the first half, containing its public sector catering and cleaning services, sold in June 1997 to Granada's Sutcliffe for £8.4 million. At the end of that year, the second half of the company was taken over in a management buyout worth more than £8.3 million.

Davis continued to add to its textile services wing as the decade neared an end. In 1998 it acquired Laundrycraft Ltd., which operated primarily in the midlands region of England. The following year, the company paid £30 million to acquire Midland Laundry Group. A specialist provider of linen rentals and laundry services to the healthcare sector, Midland brought Davis five new laundry facilities in the United Kingdom. At the end of the decade, the company made a new move to expand beyond its domestic market. In April 2000, the company acquired Blanchisserie Teinturerie de la Bièvre, which provided textile maintenance services in the Paris area and became part of the company's French subsidiary, Modeluxe Linge Services.

Elliot Group also had been showing strong growth. In 1999, the division added Strumech Engineering Ltd., which gave the company a range of products to support the telecommunications industry, particularly the mobile telephone market. The acquisi- tion the following year of Redispace & Johnson, which had been the portable building division of Initial Plant Services, cost the company £21 million and doubled the size of Elliot's building hire operations. At the same time, Elliot was preparing to branch out into the residential market, designing its own range of prefabricated homes.

HSS, meanwhile, had begun testing the waters of the huge and as yet highly fragmented U.S. market, opening its first U.S. shop, called HSS Rental Stores, in Florida in 1996. After testing the viability of its HSS Tool Hire concept, the company began a rollout of the network across the state of Florida. The company then began looking for opportunities to expand further in the United States and, in July 2001, acquired Denver-based RentX Industries Inc. That company had built up a network of 74 tool rental stores operating in 13 states. For a price of $46 million, the RentX acquisition gave the company an instant position as a major player in the U.S. tool rental market. The company then began adapting its new store network to its HSS concept, while launching a $25 million investment program for its new subsidiary.

In little more than a decade, John Ivey had guided Davis Service into the top ranks of the United Kingdom's services sector. The company also had made the beginnings of a possible international expansion--prompting some analysts to propose that the company might narrow its focus still further, possibly jettisoning its Elliot Group component, in order to concentrate on the international development of its fast-growing textile maintenance and tool hire businesses.

Principal Subsidiaries: HSS Hire Service Group PLC; The Sunlight Services Group Limited; Spring Grove Services (Ireland) Limited; Spring Grove Services GmbH (Germany); Modeluxe Linge Services SA (France); Elliott Group Limited.

Principal Competitors: Algeco SA; ARAMARK Corporation; ATCO Structures Ltd.; Ecolab Inc.; Hewden Stuart Plc; ISS-International Service System A/S; Rentokil Initial plc; The ServiceMaster Company; Steiner Corporation.

Chronology

  • Key Dates:
  • 1900: Laundry company Sunlight Services is founded.
  • 1920: Godfrey Davis begins car dealership; becomes a prominent automotive rental and leasing company.
  • 1957: A tool hire shop is launched, which later becomes HSS Tool Hire.
  • 1959: Godfrey Davis lists on the London stock exchange, then enters portable building sales and rentals.
  • 1963: Elliot Group is founded, which later becomes part of Falcon Industries.
  • 1968: HSS begins catering equipment rentals.
  • 1973: John Ivey is named CEO of Sunlight.
  • 1981: Godfrey Davis sells off automotive rental business.
  • 1987: Godfrey Davis acquires Sunlight Services for £8 million.
  • 1988: The company acquires Newbury Laundry Company; sells off Sunlight's security services division; acquires Falcon Industries, including Elliot Group.
  • 1989: The company acquires Practical Uniform Company and Cooperative Laundries Society Ltd.
  • 1991: Three of four Godfrey Davis car dealerships are sold off; the company is renamed as Davis Service Group; acquires Presco (Holdings) Ltd.
  • 1992: The company sells off Godfrey Davis Contract Hire to Bank of Scotland.
  • 1993: The company acquires HSS Hire Service Group PLC and enters tool hire market.
  • 1994: The company acquires Lakeland Pennine Group Ltd.
  • 1995: The sale of Practical Uniform Company is completed.
  • 1996: The company acquires Spring Grove Services from Granada, which also includes operations in Ireland and Germany; HSS launches first test store in Florida, HSS Rental Stores.
  • 1998: The company acquires Laundrycraft Limited.
  • 1999: The company acquires Strumech Engineering Holding and Midland Laundry Group.
  • 2000: The company establishes operations in France with the acquisition of Blanchisserie Teinturerie de la Bièvres; acquires Redispace & Johnson from Initial Plant Services Ltd.
  • 2001: The company pays $46 million for 74-store chain RentX Industries, based in the United States.
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