Kier has completed the acquisition of infrastructure consultant Mouchel for £265 million.
Preliminary talks started in December but the transaction is now expected to complete in June.
Kier is funding the acquisition through raising additional equity and the transaction will require the approval of its shareholders. This process is expected to take approximately five weeks.
On completion of the transaction, Mouchel chief executive Grant Rumbles will stand down. Haydn Mursell, the CEO of Kier, will be CEO of the expanded group.
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.”
Rumbles added: “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 £2.8bn. For that I thank my excellent management team and all of our staff for their hard work and determination over the last few years.”
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 (FM) and business process outsourcing (BPO) services that the enlarged group can offer to local authority clients, as well as those in the water and regulated industries market.