Construction firm Kier on the high road with £265m deal
Construction firm Kier has agreed a £265m deal to buy rival Mouchel in a move that will expand its presence in the UK road-building sector.
The FTSE 250 firm's cash offer for Mouchel - which has 10 offices across the UK, including one in Holywood, Co Down - includes a rights issue to raise a total of £340m to finance the bid and pay down debt.
Bedfordshire-based Kier said the bid brought together its business in the local authority roads market and Mouchel's leading position in strategic highways services.
Mouchel has been a bid target since it almost collapsed three years ago and was forced into the hands of its lenders - Royal Bank of Scotland, Lloyds Banking Group and Barclays.
Kier, which is also building a new grandstand at Cheltenham Racecourse, initially made a takeover approach to Mouchel in December, with analysts suggesting at the time that it was worth £400m.
Mouchel employs more than 6,500 staff and runs a number of road and civil engineering contracts with UK local authorities and agencies such as Transport for London. It also helps maintain the roads network in Western Australia.
Mouchel reported sales of £616.6m and underlying operating profit of £27.7m for the year to September 30. Kier said the deal will be earnings-enhancing in 2016, the first full year financial year following the completion of the acquisition - and would also deliver savings of around £10m.