Kier is to buy Mouchel in a £265M cash deal announced today, bringing to a conclusion a long running effort to sell the Surrey-based consultant.
Highways specialist Mouchel has in recent years improved its performance with revenues and profit increasing. Last month it bagged the prestigious NCE/ACE Major UK Consultant of the Year award.
In a statement Mouchel said: “The Mouchel board believes that Mouchel and Kier together will provide even greater opportunities for our staff and clients. 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.”
Bedfordshire-based Kier revealed to the City in December that it had held early talks with Mouchel over a possible deal. Mouchel was previously courted by VT Group between 2009 and 2010 and also rejected offers from Costain and Interserve four years ago.
Kier is funding the acquisition by raising additional equity and the deal is subject to shareholder approval, all of which is expected to take five weeks. The acquisition is expected to be complete in June and at that point Mouchel chief executive Grant Rumbles will step down while Kier chief executive Haydn Mursell will assume the same role of the expanded firm.
“This deal is testimony to the successful turnaround of Mouchel following its 2012 restructuring,” said Rumbles. “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.”
Mursell added: “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 highway 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.”