Building group Kier has announced it will acquire Mouchel in a £265m deal that will give the group a new order book of £9.3bn…
Mouchel, which maintains a third of Britain’s highways, is set to be taken over by UK building group Kier.
The £265m deal will be financed by a £340m underwritten rights issue, which will include Mouchel’s debt and integration costs. Under the rights issue, new shares will be issued at 858p per new share on the basis of five new shares for every seven existing shares.
Mouchel was taken over by the banks in 2012 after a £4.3m black hole was found in its accounts. The company currently employs 6,500 members of staff across six nations, including the UK, Australia, and the Middle East.
The Royal Bank of Scotland, Barclays, and Lloyds Banking Group—Mouchel’s owners—were looking for £300m to £400m for the business. The proceeds from the rights issue will be used to repay the firm’s net debt, finance the deal integration costs, and pay the expense associated with the sale.
Mouchel currently has an order book worth £2.8bn. Combined, the new group will have an order book worth £9.3bn.
The takeover by Kier will see two firms become a leader in the growing highways market. Together, the two companies will service approximately 44,000km of UK roads and 28 per of the country’s strategic road network.
Chief Executive of Kier Haydn Mursell said he is looking to expand the firm’s road building and maintenance business. The company is the fifth largest recipient of Highways Agency spending, with around £300m of annual revenue.
Mursell said: “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.”
