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  • You are here:M&A

Amey 'lined up' for private equity takeover

Amey’s parent company is in talks with two private equity firms about a possible takeover, according to reports.

Ferrovial is expected to sell Amey to a private equity firm in 2019, according to the Financial Times, and has been in talks with PAI Partners and Greybull Capital about a deal.

Earlier this month it was revealed that Ferrovial had appointed Goldman Sachs to identify a buyer for the business, which it acquired in 2003.

To make Amey attractive to buyers, the deal may also include other parts of Ferrovial’s business outside the UK, the FT reported.

Ferrovial said a decision on the sale of Amey had not yet been taken.

Amey has suffered heavy pre-tax losses of £233m over the past two years, largely stemming from provisions taken on a 25-year roads maintenance contract with Birmingham City Council.

The contractor lost a High Court battle with the council in February over the scope of works in the £2.7bn deal. Amey made a £208.5m provision to cover extra costs it faced to meet contractual milestones as a result.

Losses at Amey contributed to Ferrovial reporting a pre-tax group loss for the first half of its financial year.

A spokesman for Amey declined to comment on any potential deal and said it was “business as usual” at the firm.

Amey has picked up a number of large roads contracts this year, including a £50m design deal with Highways England in the North-west and a 15-year, £325m service contract for Highways England’s network around Liverpool and Manchester.

PAI Partners declined to comment. Greybull Capital has been contacted for comment.

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