Firm shows intention to move away from core business after scooping up Pure Recycling
Kier Group has snapped up waste management firm Pure Recycling and Pure Buildings for £7.1m in what is expected to be the first of a series of similar acquisitions.
The deal was unveiled as Kier issued a trading statement in which it said its numbers were in line with forecasts and that it was on track to deliver an “encouraging underlying performance this year”.
A source familiar with the company’s plans said Kier was currently a “pretty aggressive” player in the acquisition market and was actively looking for deals. The source said: “The company is very keen to move away from its traditional construction background and areas like waste and facilities management are its priorities.”
The deal will be seen as a continuation of Kier’s drive to diversify its revenue streams to make it less reliant on construction work.
Kier’s last significant purchase was in September 2009, when it acquired Telereal Trillium’s investment in Kent’s Building Schools for the Future Local Education Partnership to provide 34 secondary schools in Kent. Before that it bought Hugh Bourn Developments in 2006.
Paul Sheffield, Kier’s chief executive, said: “This puts us in a very strong position to capitalise on a growing market sector where the cost of sending waste to landfill is becoming increasingly prohibitive. It also creates synergy with our existing Street Services business by enabling us to offer an integrated waste collection and recycling solution for customers.”
Andy Brown, an analyst at Panmure, said: “The acquisition makes a lot of sense. It is the type of purchase we’d expect a company like Kier to be doing at the moment, expanding its services business.”
Elsewhere in the sector’s still-depressed M&A market, Morgan Sindall’s social housing arm Lovell is poised to acquire MJ Gleeson’s social housing maintenance division Powerminster Gleeson Services after weeks of talks.
Kier on the coalition
“We remain in a period of uncertainty and the impact of the policies of the incoming government is as yet unknown.
However, Kier is well placed to attract work through its wide network of local offices and the several frameworks in which we are involved. In the outsourcing sector we are experiencing a rise in opportunities as businesses examine their costs.”