Facility Management Industry

Market Size
INR 5 lakh crore in 2018

Annual Growth Rate
Growing at 20-25% CAGR annually

Organized Segment
10% of the market growing at 35.72% annually

Industry Median EV/EBITDA
13.4x (ttm)

Facility Management Industry
 
Indian Facility Management Industry

Facility Management (FM) refers to the use of a third-party service providers to maintain a part or entire building facility in a professional manner. It is increasingly gaining popularity amongst commercial as well as residential clients driven by modernization, rapid urban development and a growing awareness of advantages arising from outsourcing non-core business activities.

The Indian facility management market accounts for 3.2% of the GDP of the country and is at present an INR 5 lakh crore market and is expected to grow at a rate of 20-25% annually. The market is highly fragmented with relatively few organized players. However, with the growing formalization of the economy, the proportion of organized players is steadily increasing.
At present, the organized FM services industry in India is valued at INR 50 thousand crore constituting 10% of the total market. This is expected to grow to INR 1.25 lakh crore by 2022.[1] In India FM services companies have only tapped 25% of the addressable market with 75% of this work still being undertaken in-house, a stark contrast to 49% at the global level[2]
 
Segmentation of FM Services
The Facilities Management Industry can be broadly classified into two segments:
 
Hard Facilities Management Services
Hard Facilities Management Services refers to security, operation & maintenance of property, engineering, landscaping and similar elements of an asset

Soft Facilities Management Services
Services other than hard FM which support the operation of the facility (ex: catering, cleaning, pest control, laundry, parking) are generally classified as Soft Facility Management Services
 
Facility Management (FM) Services
Hard FM Services (Building Operations & Maintenance)
Soft FM Services (Support Services)
Security Services
Cleaning, Janitorial & Housekeeping Services
Mechanical, Electrical and HVAC Maintenance
Pest Control Services
Plumbing Services
Catering
Asset Management Strategies
Business Support Services (Office & Help Desk Support etc.)
Short-term Repairs & Preventive Maintenance Services
Gardening & Landscaping
Energy Management
Guest House & Service Apartment Management
 
Key Trends

- Consolidation in the FM industry as the unorganized sector transforms and gets absorbed into the organized sector

- FM industry is gearing up for a historic shift towards automated services, with considerable investment of manpower and resources toward creating technology driven services platforms

- FM companies are competing on meeting stringent quality, environmental, health and safety (ISO 9001 & 14001 and OHSAS 180001) standards

- Several major MNCs and domestic companies have started investing in India and looking for FM services that match global standards

- Industrial and Manufacturing sector shifting from in-house maintenance to outsourcing FM services requirements

  • - Growing influx of trained and qualified engineers to help industry adapt to global engineering standards and best practices
  •  
Top Players
 
Company Name
Primary Services
Updater Services (P) Limited (UDS)
Facility Management
BVG India Ltd.
Facility Management
ISS Facility Management
Facility Management
Compass Group Plc. - India
Food Services & Facility Management
Quess Corp Ltd. – Avon, Spiffy
Business Services, Facility Management
Sanjay Maintenance Services
Facility Management
SIS Group Enterprises – ServiceMaster Clean, Dusters Total Solutions India, TerminixSIS
Security Services, Facility Management & Pest Control
G4S - India
Security Services & Facility Management
Jones Lang LaSalle, Inc., (JLL) - India
Investment Management - Real Estate, Facility Management
Sodexo
Food Services & Facility Management
CB Richard Ellis, Inc., - India
Investment Management - Real Estate, Facility Management
Cushman & Wakefield - India
Investment Management - Real Estate, Facility Management
Mortice Group PLC – Tenon FM
Facility Management
Colliers International Group Inc., - India
Investment Management - Real Estate, Facility Management
Topsgrup – Cheep Care
Security Services & Facility Management
ServiceMax Facility Management Pvt. Ltd.
Facility Management
Knight Frank India Pvt. Ltd.
Investment Management - Real Estate, Facility Management
EFS Facilities Services
Facility Management
Pest Control (India) Pvt. Ltd
Pest Control
 
Private Equity and M&A Activity
 
Year
Acquirer
Target
Target/Transaction – Note
Type
2018
IndiaNivesha
CLR Facility Services Pvt. Ltd.
IndiaNivesha picked up a minority stake in CLR Facility Services Pvt. Ltd., a manpower and facility management company for an undisclosed amount
PE[3]
2017
Motilal Oswal PE
Updater Services
Updater Services is one of the leading FM service providers in India
PE[4]
2017
Samara Capital
Sanjay Maintenance Services
Sanjay Maintenance Services Pvt. Ltd. (SMS) is one of the largest facilities management service providers in India operating primarily in the BFSI, IT/ITeS, manufacturing, retail and office space segments
M&A[5]
2016
SIS Group
Dusters Total Solutions
Dusters Total Solutions, a Bengaluru-based integrated facility management services provider managing over 1,200 locations
M&A[6]
2015
Quess Corp
Aravon FM
Aravon FM is an integrated FM service provider
M&A[7]
2015
SILA Solutions
Evoncare Pest Control Services
Envocare offers herbal-based formulas to get rid of pests
PE[8]
2014
True North
Hicare
Hicare is India’s second largest pest control services firm
M&A[9]
2013
CX Partners
SIS
SIS is the largest business services organization in India
2013
Sodexo
Radhakrishna Hospitality Services
Radhakrishna Hospitality is India’s largest food services player
M&A[11]
2011
Compass Group
Vipul Facility Management Private Limited, New Delhi
National player in the facilities management industry
M&A[12]
2011
Compass Group
Ultimate Hospitality Services Private Limited
Strong regional food services business headquartered in Hyderabad
M&A[13]
2011
3i Group Plc.
BVG
BVG is India’s largest Integrated services company
2010
Compass Group
Tirumala Hospitality Services
Regional player in food services in Western India
M&A[15]
2010
TVS Capital
Dusters Total Solutions
Dusters Total Solutions, a Bengaluru-based integrated facility management services provider managing over 1,200 locations
2009
Compass Group
Epicurean Enterprises Private Limited
National facility management and housekeeping services company
M&A[17]
2009
ISS
Hicare
India’s second largest pest control services firm
M&A[18]
2008
Quess Corp
Avon FM
Avon is a premier FM service provider managing more than 550 sites
M&A
 
Global Listed Players
 
Company Name
Exchange
EV (in INR thousand crore)
EV/EBITDA
CBRE
NYSE
126.7[19]
12.7x
Colliers
NASDAQ, TSX
23.8[20]
14.3x
Compass Group
LSE
261.9[21]
14x
Cushman and Wakefield
NYSE
184.1[22]
26.6x
G4S
LSE, CPH, FRA
47.8[23]
10.3x
JLL
NYSE
54.5[24]
9.6x
Mortice Group Plc.
LSE
0.3[25]
3.7x
Quess Corp
BSE, NSE
15.6[26]
37.2x
Security & Intelligence Services (SIS) India
BSE, NSE
8.4[27]
24.9x
Sodexo
Euronext, FRA
126.2[28]
10.5x
Median
13.4x
 
 
 
Target Industries
The facility management services are outsourced services and are primarily preferred by companies where a high standard of cleanliness is expected. These include companies from the IT, ITES, BPO, BFSI, manufacturing, FMCG, infrastructure, healthcare, retail, education and government sectors
 
Growth Drivers
  • The Indian Facilities Management (FM) industry is in the midst of rapid development. The anticipated growth in the market can be attributed to:
  • - Growth in commercial and residential real estate
  • - Increase in SEZs, mega food parks, smart cities and housing projects
  • - Greater awareness of cleanliness and hygiene amongst industries
  • - Reduction in operating costs of the facilities/buildings
  • - More outsourcing by corporates who were hitherto insourcing
  • - Inability to provide specialized cleaning by inhouse personnel
  • - Increased business activities from Tier-2 and Tier-3 cities
  • - Increase in outsourcing of facility management services by Government offices
  •  
Notes
Exchange Rate: 1 USD = 65 INR = 0.75 GBP = 0.85 Euro
Disclaimer: This information has been collected through secondary research and SMERGERS is not responsible for any errors in the same
 
References
  1. http://jllapsites.com/real-estate-compass/2017/12/growth-facilities-management-india/
  2. http://jllapsites.com/real-estate-compass/2017/12/growth-facilities-management-india/
  3. https://www.dealstreetasia.com/stories/india-dealbook-196-91087/
  4. https://economictimes.indiatimes.com/industry/banking/finance/motilal-oswal-private-equity-invests-rs-100-crore-in-updater-services/articleshow/57393601.cms
  5. https://economictimes.indiatimes.com/news/company/corporate-trends/samara-capital-acquires-facilities-management-company-sanjay-maintenance-services/articleshow/58287876.cms
  6. https://www.vccircle.com/security-services-firm-sis-to-make-first-acquisition-since-ipo
  7. https://economictimes.indiatimes.com/quess-corp-ltd/infocompanyhistory/companyid-55515.cms
  8. https://www.vccircle.com/facility-project-management-services-firm-sila-acquires-51-stake
  9. https://www.dnaindia.com/business/interview-our-products-make-dlf-godrej-properties-termite-proof-himanshu-chakrawarti-2372725
  10. SIS Group Enterprise Annual Report - FY18
  11. https://www.business-standard.com/article/companies/sodexo-buys-radhakrishna-hospitality-for-rs-400-cr-109031000169_1.html
  12. http://www.compass-group.co.in/who-we-are/who-we-are-about-india.htm
  13. http://www.compass-group.co.in/who-we-are/who-we-are-about-india.htm
  14. https://www.vccircle.com/3i-backed-facility-management-firm-bvg-switches-plan-from-pe-funding-to-ipo
  15. http://www.compass-group.co.in/who-we-are/who-we-are-about-india.htm
  16. https://economictimes.indiatimes.com/industry/banking/finance/security-services-provider-sis-eyes-75-stake-in-dusters-total-solutions-for-rs-350-crore/articleshow/53702581.cms
  17. http://www.compass-group.co.in/who-we-are/who-we-are-about-india.htm
  18. https://www.dnaindia.com/business/interview-our-products-make-dlf-godrej-properties-termite-proof-himanshu-chakrawarti-2372725
  19. https://in.finance.yahoo.com/quote/CBRE/key-statistics?p=CBRE&.tsrc=fin-srch-v1
  20. https://in.finance.yahoo.com/quote/CIGI/key-statistics?p=CIGI
  21. https://finance.yahoo.com/quote/CPG.L/key-statistics?p=CPG.L&.tsrc=fin-srch
  22. https://in.finance.yahoo.com/quote/CWK/key-statistics?p=CWK&.tsrc=fin-srch-v1
  23. https://in.finance.yahoo.com/quote/GFS.L/key-statistics?p=GFS.L&.tsrc=fin-srch-v1
  24. https://in.finance.yahoo.com/quote/JLL/key-statistics?p=JLL
  25. https://in.finance.yahoo.com/quote/MORT.L/key-statistics?p=MORT.L&.tsrc=fin-srch-v1
  26. https://finance.yahoo.com/quote/QUESS.BO/key-statistics?p=QUESS.BO&.tsrc=fin-srch
  27. https://finance.yahoo.com/quote/SIS.BO/key-statistics?p=SIS.BO
  28. https://in.finance.yahoo.com/quote/SJ7.F/key-statistics?p=SJ7.F&.tsrc=fin-srch-v1