Building services group Siteserv is set to buy a UK player in a deal worth a potential €64 million.
The move will double the Irish group's turnover to €250 million and bring earnings before tax, interest and write-offs to €40 million, Siteserv's chief executive, Brian Harvey, told The Irish Timesyesterday.
The Dublin- and London-listed company announced that it has agreed to buy Deborah Services Ltd, a leading UK construction support services group.
Siteserv will pay £42.3 million (€57.5 million) for the British company, £40.2 million in cash with the balance paid by the issue of 10 million of its shares at 30p to Deborah Services' owners, managing director Chris Neate and financial controller John Neal.
They will not be able to sell the shares for a year after they are issued. Siteserv has also agreed to pay up to a maximum of £5 million more, based on Deborah's financial performance and profitability over the next three years.
If the targets are met, this could bring the final cost to €64.1 million at current exchange rates.
Mr Harvey said yesterday that Siteserv is borrowing the cash element of the price from Anglo Irish Bank, and added that the group had "no problem" getting the finance. Because of the size of the deal, the rules of both stock markets demand that Siteserv must get its shareholders' approval before it can complete the transaction.
Deborah Services is based in Wakefield, Yorkshire in the north of England. In the 12 months ended September 30th, it had a turnover of €108 million and operating profits of €10 million.
It has 32 depots based across Britain and is focused largely on providing services for building companies involved in infrastructure, utility and power plant development.
Mr Harvey said yesterday that the company has little exposure to the British house-building market. "It will double our size, and also it will reduce our exposure to the Irish residential market to below 10 per cent of our total business," he said.
The deal will be Siteserv's first step into Britain, a market it said it would target when it floated in November 2006.
Developer and Arnotts' stakeholder Niall McFadden is a shareholder in Siteserv. The company provides services like scaffolding, fencing and barricades for building sites.
It is largely focused on selling to companies involved in infrastructure and commercial development.
