CONTRACTOR PETERHOUSE has pledged to invest £7M in training, plant and recruitment at rail maintenance group First Engineering after agreeing a £65.5M takeover last week.
The deal gives Jackson Civil Engineering parent Peterhouse a major slice of the rail maintenance market as the industry gears up for an expected 10 year £33bn railway spending programme.
Peterhouse has expanded into civil engineering since buying Jackson Group in 1999. It also owns power transmissions and security fencing business Certas, formerly known as Eve.
First Engineering is the last of the independent rail maintenance firms to have been taken over. It was originally ScotRail's in-house maintenance division but was bought out by its management after British Rail was privatised.
After the buyout First was 50.5% owned by its staff, with remaining shares split between minerals and process contractor Weir and venture capital firm 3i.
Weir decided to sell so that it could concentrate on its core business and 3i is thought to have wanted to cash in on the increased value of its investment.
A spokesman for First Engineering said the management and staff had agreed to the deal because the company needed investment cash to help the business grow.
First also wants to bid for larger and longer term maintenance projects as Railtrack moves from 10 to 20 year term contracts. But it needs the balance sheet strength of a larger group to do so.
First Engineering employs 2,800 staff and has term rail maintenance contracts in Railtrack's Scotland and North West regions. In the year to 31 March it increased pretax profits from £5.6M to £9.2M on turnover up from £173.2M to £206.4M.