Miller Construction's order book of 拢1.4bn doubles Galliford Try鈥檚 order book at a stroke to 拢2.8bn.
Galliford Try said 鈥渢he 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鈥�.
Galliford Try is now targeting 2018 construction turnover of 拢1.5bn instead of its previous target of 拢1.25bn. Its directors said they had got a bargain.
Miller Construction reported 2013 revenues of 拢409m and a loss before interest and tax of 拢4m. In the past year Miller Construction has restructured or exited a number of mainly loss-making contracts and is expected to return to profitability in the current year.
Miller Construction had gross assets of 拢232m at 31 December 2013. Under the terms of the deal, Miller Group has agreed to transfer Miller Construction with a nil net assets balance, including a cash balance of 拢23m. In addition, Miller Construction has a PPP portfolio with an invested value of approximately 拢14m.
Galliford Try has identified a total of 拢7m a year of cost synergies, the majority of which it would expect to realise during the financial year ending 30 June 2015. 聽Restructuring is expected to cost 拢4m but despite this the Galliford Try board expect the acquisition to be earnings enhancing in the year ending 30 June 2015.
Galliford Try chief executive Greg Fitzgerald 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."
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