South Africa’s largest construction business WBHO, which has a revenue of £1.8bn, has acquired a 60% stake in Russells Construction for £32.8m.
Both of Russells directors, Andrew and Gareth Russell, will remain as shareholders and joint managing directors of Russells Construction and will still be in charge of the day-to-day running of the business.
Russells said the deal would allow it to bid for major projects, and said there would be “no changes” to how the business is operated.
“We’re already competing successfully against many of the big national players and delivering major multimillion pound projects throughout Manchester, the North West and beyond,” said Andrew Russell.
“This investment supports the existing growth plan, to establish ourselves as a Tier 1 contractor.
“We’re confident the substantial strategic support and financial backing WBHO provides, will, when combined with the knowledge and skills of our management and site teams on the ground, put us in an excellent position to secure an even larger volume of higher value projects throughout the North West and start to look at large-scale public sector opportunities.”
Russells Construction currently has a turnover of around £90m and is aiming to hit revenue of £104m next year. It employs 160 staff at its Trafford Park headquarters and is working on a number of high-profile projects across the region, including Three St Peter’s Square and the Axis tower in Manchester City Centre.
In a separate deal, WBHO has also purchased a 32% stake in sister company Russells Homes for £2.3m. Andrew and Gareth remain the majority shareholders in this company.
The stake in Russells is the South African company’s latest acquisition in the UK after it bought into London-based concrete frame specialist Byrne Group last year. It also owns Probuild, one of Australia’s largest contractors.
Paul Foley from WBHO said: “We have been seeking growth opportunities globally and identified Russells Construction as an excellent strategic fit for our UK ambitions, with strong and steady growth, a secure forward order book, and a healthy pipeline. In addition, the investment in Russell Homes offers us entry into the UK residential market which is a particularly exciting prospect.
“People are a construction company’s greatest asset and right from the top-level of management through to those working on site, Andrew and Gareth have built a fantastic team. We feel their approach, the culture and ethos they have created, fits neatly with our own. They have a thoroughly impressive track record and the ability to achieve so much more with the right support behind them, something we are very happy to provide to assist the business achieve its growth ambitions.”