May Gurney has announced the takeover of Scottish utility infrastructure maintenance company Turriff in a deal worth up to £13.6 million.
The firm will pay up to £8.6m initially with a further £5m payable over three years based upon performance factors including retention of key staff and future revenue targets.
May Gurney will assume approximately £9.4m in debt for the Aberdeen-based company who employ more than 550 staff and hold interests in gas, water, electricity and multi-utility services.
May Gurney chief executive Philip Fellowes-Prynne said: “We are delighted to welcome Turriff to the May Gurney group, whose focus on developing long-term client relationships and reputation for assured operational delivery is so aligned to our own.
“Turriff will provide access to the power and gas maintenance sectors, the Scottish support services market and consolidates our position in water. These are all key growth markets with dependable, sustainable income streams which will provide us with significant opportunities to develop long-term relationships with new clients.”
May Gurney believe it will can make cost savings of £300,000 a year through the takeover. The firm said the deal would guarantee access to the UK’s regulated £1.7bn gas marketplace.
Turriff’s acquired order book is approximately £90m, with available extensions worth up to an additional £70m. Its key long-term clients include Scotia Gas, Scottish Water and Scottish & Southern Energy.
For 2010, based on unaudited management accounts, Turriff had earnings before interest, tax, depreciation and amortisation of £2.5m on revenues of £41m. At completion, Turriff had a balance sheet showing total assets of approximately £18m.
The transaction underpins May Gurney’s existing £1.4bn forward order book and long term earnings visibility.