Galliford Try PLC has announced today the acquisition of the Miller Construction business from Miller Group Holdings (UK) Limited, for a total price of £16.57 million. The acquisition is cash accretive and will be earnings enhancing in the year ending 30 June 2015.
Miller Construction is a UK only construction business which delivers building and infrastructure projects to both the public and private sectors. In the year to 31 December 2013, Miller Construction reported revenue of £409 million.
The tactical acquisition of Miller Construction is consistent with Galliford Try's stated strategy of disciplined and selective growth in its construction business, with a particular focus on developing our positions on regional and national frameworks. The transaction accelerates the growth in construction turnover towards £1.25 billion, and increases the 2018 target to circa £1.5 billion. The acquired order book of £1.4 billion doubles the Group's order book to £2.8 billion.
The Directors believe that the acquisition price of £16.57 million represents a very attractive valuation for Galliford Try.
For the year ended 31 December 2013, Miller Construction generated £409 million of revenue and a loss before interest and tax of £4 million. During the 2013 financial year and subsequently, Miller Construction has restructured or exited a number of mainly loss-making contracts and is now anticipated to return to profitability in the current year.
Miller Construction had gross assets of £232 million at 31 December 2013. Under the terms of the acquisition, the Miller Group has agreed to transfer Miller Construction with a nil net assets balance, including a cash balance of £23 million.
In addition, Miller Construction has a PPP portfolio with an invested value of approximately £14 million. Galliford Try has identified a total of £7 million per annum of cost synergies, the majority of which it would expect to realise during the financial year ending 30 June 2015. In order to achieve these synergies, it is expected that £4 million of one-off restructuring costs will be incurred, mainly during the year ending 30 June 2015. Notwithstanding the restructuring costs, the Directors believe that the acquisition will be earnings enhancing in the year ending 30 June 2015.
Galliford Try was advised on the acquisition by Gleacher Shacklock LLP.
Commenting on the Acquisition, Greg Fitzgerald, Chief Executive of Galliford Try, said:
"We are delighted to announce the acquisition of Miller Construction, achieved at a very good price and with no net cash consideration. The acquisition brings together two construction businesses with a strong strategic fit and accelerates our strategy of growth into an improving marketplace."