Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Mears sells M&E arm Haydon for £1

Mears has sold its M&E division Haydon to management for £1.

Management at the M&E firm have set up an acquisition vehicle, Curzon 3003, to buy the firm for £1, with a deferred sum of up to £7m owed if Curzon or Haydon and their assets are sold.

In addition, Mears is converting an existing intercompany loan into a £2m interest bearing secured loan to be repaid after five years, and a £7m unsecured loan, which is to be repaid out of sums received on certain existing contracts and a share of future profits generated.

Haydon

Haydon specialises in the design and installation of mechanical and electrical services across a number of sectors in the UK, but primarily for new-build residential developments.

The services provided include the design of the works, the management of the work entailed and includes, in most cases, the post-works maintenance programme.

It is run by managing director David Cutler from its head office in London’s Docklands.

It had revenue of £62.3m and made a pre-tax loss of £1.8m for the year to 31 December 2012. For the six months to 30 June 2013, it had unaudited revenue of £18.7m and made a pre-tax loss of £1.4m. Gross assets as at 30 June 2013 were £29.8m.


Haydon was acquired by Mears in 1999 and in 2012 it represented 9 per cent of the group’s turnover.

It had been running at a loss due to what Mears said was “limited new-build opportunities and increasing competition for [its] services”.

The move by Mears, which this week confirmed a £110m housing repairs contract with Southwark Council, follows a turbulent year for the M&E sector, which saw other major firms exit the market including Mitie, which closed its M&E offering in May after the division made a trading loss of £3.1m in the year to 31 March 2013.

Mitie revealed costs of £22.1m through its closure of the M&E business, and its move followed M&E giant Emcor’s announcement earlier that month that it would withdraw from the UK construction market.

Mears chief executive David Miles said he was “delighted” to have agreed the sale and acknowledged the “significant role” Haydon had played in the growth of Mears over the past 14 years.

He added: “The activities of Haydon have now become non-core and the transaction is good for Mears and will now allow the group to focus solely on growing its core operating divisions.”

Some maintenance contracts being carried out for local authorities will be transferred to another Mears Group company as part of the deal.

These contracts contributed revenues of £661,000 and profit before tax of £7,000 during the year ending 31 December 2012.

Mears estimates the deal will generate cash of £5m within a year of completion from payments received from Curzon and tax benefits.

Mears is expected to incur a one-off writedown to its income statement of around £17.5m as a result of the deal.

Haydon directors David Cutler, Glyn Mays, Anthony Percival and Gary Young will form part of the management team of Curzon.

  • Update: The deal was passed by shareholders on 21 November with almost 100 per cent of votes in favour of the move.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.