Kier Group, the property, residential, and construction company, has announced that it has entered into a conditional agreement to buy infrastructure services firm Mouchel, which has offices in Liverpool and Manchester.
Mouchel is an international infrastructure services and business services group. It provides advisory, design, project delivery and managed services to the highways and transportation, local government, property, emergency services, health, education and utilities markets in the United Kingdom, the Middle East and Australia. It is the leading provider of repair and maintenance services to the UK's strategic road network.
A statement from Kier to the stock market said: "The combination of Kier and Mouchel brings together Mouchel's leading position in strategic highways services with Kier's presence in the local authority roads market and creates a sector leader in the growing UK highways maintenance and management market."
Kier agreed to acquire Mouchel's total issued share capital for a total consideration of £265m in cash from the Mouchel Sellers to be financed by a £340m fully underwritten rights issue. Under the rights issue, new shares will be issued at 858p per share on the basis of five new shares for every seven existing shares.
Mouchel reported group revenue of £616.6m and underlying operating profit of £27.7m for the year ended 30 September 2014. Revenues for the three months ended 31 December 2014 increased by 38% compared to the same period in the previous year.
The acquisition creates an enlarged group with a combined order book of £9.3bn, made up of Kier's order book of £6.5bn and Mouchel's order book of £2.8bn.
Shares in Kier this morning were up 4p to 1,629p.