Kier Group plc has announced that it has completed the disposal of Mouchel Consulting to WSP Global Inc. for a total consideration of £75 million (US$92 million), satisfied in cash.
Mouchel Consulting, acquired in June 2015 as part of Kier's acquisition of Mouchel, provides engineering, environmental and asset management consultancy services, principally to infrastructure markets. On 4 July, Kier announced that it was undertaking an evaluation of the strategic options for the Mouchel Consulting business including a possible disposal.
For the financial year ended 30 June 2016, Mouchel Consulting reported revenue of £125 million generating an operating profit contribution of £8 million and a profit before tax of £5 million. The gross assets of the company, the subject of the disposal, were £29 million at 30 June 2016.
The disposal is expected to result in an immediate profit of approximately £40 million, subject to post-completion adjustments. The net disposal proceeds will be retained by Kier for future investment purposes and to further reduce debt, supporting Kier's Vision 2020 target of net debt to EBITDA ratio of less than 1x which was achieved ahead of schedule in 2016.
Haydn Mursell, chief executive of Kier, commented:
"Having completed the integration of Mouchel, we are well progressed with the simplification of our portfolio of businesses. The disposal of Mouchel Consulting continues this process and provides increased capital to focus on the opportunities across our core businesses which will underpin the Group's future growth."