International infrastructure and business services group Mouchel has announced that it has reached an agreement for the sale of the group to integrated property, residential, construction and services group, Kier for the sum of £265 million.
The transaction follows a transformation in Mouchel’s performance during the last three years which has seen the group grow underlying operating profit to £27.7 million on turnover of £617 million in the financial year ended 30 September 2014. Revenues for the three months ended 31 December 2014 have increased by 38 per cent compared to the same period in the previous year. Since the end of the period, Mouchel has continued to experience similar growth and has maintained margins at historic levels.
The combined company will be a sector leader in the growing UK highways management and maintenance market, servicing Highways England, Transport for London and local authorities.
The transaction will also enhance the range of Facilities Management and Business Process Outsourcing services that the enlarged group can offer to local authority clients, as well as those in the Water and Regulated industries market.
Grant Rumbles, Mouchel’s chief executive, said:
“Kier and Mouchel are an excellent fit. The enlarged company will enable us to improve our offer to customers and to enhance the career opportunities of our employees.”
“This deal is testimony to the successful turnaround of Mouchel following its 2012 restructuring. Refocusing the business on its core strengths and targeting profitable growth has brought us to a position where our order book is now more than £2.8 billion.”
Haydn Mursell, CEO of Kier plc commented:
“Over the last three years, Mouchel has been transformed into a strong business with market leading positions. The combination of Kier and Mouchel, particularly in the provision of UK highways maintenance services, creates a leader in a growing marketplace. The Acquisition is consistent with and accelerates the delivery of our Vision 2020 strategy and will provide compelling value to shareholders.”
Kier is funding the acquisition through raising additional equity and the transaction will require the approval of its shareholders.
The acquisition is expected to complete in June, when Rumbles will stand down and Mursell will become CEO of the expanded group.