Contractor gives up on disposal of plant services arm after failing to interest buyers
Carillion has abandoned the sale of its Alfred McAlpine Plant Services division, which it put on the market for an estimated £20m in May.
According to market sources, the deal was scrapped because potential buyers baulked at the asking price.
If it had gone ahead, it would have been the first Alfred McAlpine division to be offloaded after Carillion’s acquisition of the group for £574m in February.
The plant division, which made a profit of £2.5m on turnover of £25m in 2007, includes an outsourcing service to the quarry industry and an uninterruptible power supply business. Potential buyers are thought to have included Speedy Hire and BSS.
A source said: “Carillion spoke to a few interested parties but the asking price was too high. Given the economic background, the company probably realised it had more important things to do than hawk the business around for sale and things went dead.”
Carillion was unavailable for comment.
There was also speculation that Carillion was looking to sell Alfred McAlpine Utility Services, the £290m-turnover engineering supplies group that made an operating profit of £6m in 2007. A company spokesman denied it was ever on the table, calling it “an integral part of Carillion’s business”.
In a trading update last week, Carillion forecast double-digit profit growth in 2009. In the Middle East, the company said growth would be increasingly driven by Abu Dhabi as activity tailed off in Dubai. It said it was on track to increase turnover in the region from £337m in 2007 to more than £600m by the end of 2009.
Carillion in numbers
From trading update:
£50m Annual cost saving from Alfred McAlpine purchase
£59.7m Revenue from sale of six PPP investments in 2008
£275m Expected net borrowings at 31 December 2008