Kier Group has sold its fleet hire business Kier FPS to private equity fund Endless LLP for £17.9m.
The sale of the business, which joined Kier as part of the 2013 acquisition of May Gurney, is “in line with strategy”, according to the group.
FPS had been “under review” since it came into the group as part of what Kier described as its “disciplined approach to capital allocation”.
Proceeds will be used to pay down some of Kier’s outstanding debt, while FPS’s own finance lease debt of around £32m will be transferred to the buyer.
Kier chief executive Haydn Mursell said: “FPS was acquired as part of the May Gurney transaction.
“However, in light of our strict return on capital requirements, we concluded that it would be appropriate to dispose of FPS to a specialist operator, which will be managed by the existing management team.”
In its latest set of accounts, covering the 12 months to June 2014, FPS reported third-party revenue of £36m and a pre-tax profit of £4m.
Its estimated revenue for 2014/15 was £34m, with profit of £5.6m.
As part of the sale, Kier has struck a deal that will see FPS continue to provide fleet services to its local authority and utilities businesses.