Alfred McAlpine has a warchest of £200m to spend on acquisitions and PFI investments after the sale of its housing division to Wimpey for £461m.
The construction services group, which completed the sale this week, said capital projects, facilities management and utilities firms were on its shopping list.

Oliver Whitehead, chief executive of McAlpine, said the firm was already looking at prospective buys and he had received offers from two firms this week.

Whitehead said that of the £461m sum for the housing arm – to be paid in instalments – £150m would pay off debt, £100m would go to shareholders, and about £200m would be left for McAlpine to invest.

He said the firm would look carefully at acquisitions, but wanted to sew up a deal within six months.

In the meantime, McAlpine is likely to become the centre of attention. Whitehead is expecting "umpteen people bringing wonderful opportunities to us because they think we have money to burn. But we will continue to be cautious – we don't want to buy a pig in a poke".

The firm's first choice of purchase is a facilities management, asset management or utilities firm, although it is not ruling out a construction firm specialising in capital projects.

Whitehead added that McAlpine would look to increase its investment in PFI schemes beyond its present level of £25m.

Analysts said McAlpine could now join a "premier league" of contractors that should be rerated by the stock exchange because of their burgeoning support services activities. Other possible premier league contractors are Carillion, Amec and Balfour Beatty.

However, one analyst warned that McAlpine could be vulnerable to a takeover bid if it hesitated in its quest for acquisitions. He also predicted that McAlpine would

sell off non-core parts of its remaining operations, including its slate business.

The sale of McAlpine Homes leaves the construction business with a turnover of £507m and pre-tax profit of £16.5m for the year to

31 December 2000. The firm is now split into two divisions: capital projects and support services.

The Wimpey deal is the third largest housing takeover in the sector this year, behind Persimmon's £560m acquisition of Beazer and Taylor Woodrow's £535m purchase of Bryant.

The sale will lead to 450 job losses and the closure of seven McAlpine offices in a drive by Wimpey to save £18m a year in overheads (see factfile).

Former McAlpine Homes group managing director Graeme McCallum will resign from McAlpine after the completion of the deal, and will not transfer to Wimpey.

McAlpine Homes staff promised fair deal

Wimpey chief executive Peter Johnson has assured McAlpine Homes staff that they will be treated fairly, after announcing that 450 job cuts would result from the deal. Johnson said the firm was determined to be upfront and honest with staff about redundancies, which will be mainly in administrative posts. The move follows concern over Persimmon’s handling of redundancies following its takeover of rival Beazer. Johnson said Wimpey’s approach was demonstrated by the 435 job cuts it made in the wake of its merger of Wimpey Homes and McLean Homes subsidiaries at the start of the year. He said: “I will not say there have not been any problems [with the McLean redundancies], but I do not think there have been very many. I hope McAlpine staff will look at the way we handled the Wimpey merger and see that people were treated properly.” The integration of Wimpey and McAlpine will be managed by Keith Cushen, who oversaw the McLean merger. Wimpey said it plans to reduce the number of homes built by the newly enlarged firm to between 12,000 and 13,000 in 2002, down from the combined figure of 13,847 last year.