Background
Temple Lifts was founded in 1987 and quickly became recognised for its expertise in handling complex lift modernisation projects. This reputation helped expand its maintenance portfolio across Greater London.
At the point Rcapital acquired Temple:
- It maintained over 4,800 lifts and escalators across a range of sectors.
- Employs over 104 professionals across three regional offices.
- Headquartered in Bromley, with additional locations in Havant and Stoke-on-Trent.
- Services lifts and escalators in a range of environments, from two-storey care homes to high-rise commercial buildings.
Temple Lifts was originally acquired by Hitachi in 2017 as a strategic move to introduce its vertical transportation products into the European market. However, this initiative faced challenges, leading Hitachi to engage Lazard in 2023 to conduct a strategic review of Temple Lifts’ future.
Rcapital was chosen as the preferred bidder due to its collaborative approach in creating a turnaround plan that effectively balanced operational improvements with economic execution risks. At the time of acquisition, Temple Lifts was operating at a loss of approximately £0.7m on annual sales of £15.8m.
Turnaround Strategy
To stabilise Temple Lifts, Rcapital introduced an experienced sector operator alongside a finance operating partner to oversee the implementation of a structured turnaround plan. This strategy focused on four key areas:
Resetting the control environment
- Clear operational targets were established, with increased supervision to ensure compliance.
- Enhanced scrutiny of overtime and engineer productivity was introduced to improve efficiency.
Integration of historical acquisitions
- Temple Lifts had previously grown through acquisitions, leading to duplication of costs.
- Several offices were closed, and headquarters were relocated to a more suitable location.
Defining a sales strategy
- A structured approach was implemented for maintenance, repair, and major works.
- Recruitment efforts focused on strengthening the repair sales team.
- A pricing matrix was developed to enforce minimum acceptable gross margins.
- Onerous maintenance contracts were exited.
Working capital improvement
- Payment terms negotiations were prioritised when securing new contracts.
- Alternative suppliers were explored to achieve better financial terms.
Exit
Through Rcapital’s strategic ownership, Temple Lifts returned to profitability within six months and achieved a run-rate EBITDA of £1m within 12 months.
In October 2024, Rcapital successfully exited Temple Lifts via an off-market transaction to Provident Lifts. Provident Lifts was chosen as the acquirer due to its deep understanding of the business and established relationship with the management team.
Rcapital was advised by Browne Jacobson, while Provident Lifts received advisory support from Altenburg Advisory and DAC Beachcroft. Funding for the transaction was provided by Thincats.
