Morgan Sindall buys Connaught
Published: 10 September, 2010
LONDON: Morgan Sindall expects to add £200m in annual revenue after it bought contracts and assets from distressed social-housing contractor Connaught in a £28m deal.
Morgan Sindall will pay for the acquisition out of its existing cash reserves. The company's shares climbed around 6% in early trading in response to the news.
John Morgan, chairman of Morgan Sindall said. "This is a step change ... The acquisition significantly increases the scope and scale of our planned and reactive maintenance activities."
The contracts and assets will be integrated into the company's affordable housing division Lovell Partnerships. It is expected that 2,500 employees will transfer to Lovell as part of the agreement.
"Our focus now will be to ensure a smooth handover of the contracts and to minimise disruption.... The board believes that this acquisition represents excellent value," Morgan said.
A spokeswoman for administrators KPMG told the BBC: "It is unusual to make a deal [like the one with Morgan Sindall] so early on in the process." She could not confirm whether sub-contractors attached to the contracts sold to Morgan Sindall would now be taken on by the buyer.