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Kier in talks to buy Stewart Milne's construction arm

Kier has confirmed it has entered into discussions with Aberdeen-based Stewart Milne Group over a possible acquisition of its construction arm.

CN reported in September that the group had increased pre-tax profit to more than £400,000 for the year to June 2011 despite a drop in turnover from £251m to £239.4m in the same period.

However in 2010 the group announced it had recorded its first-ever loss.

A Stewart Milne spokesperson said: “We are carefully considering this and will be undertaking a period of due diligence. This is due to begin in the next week and is targeted to be completed by the end of March. We cannot provide any further information until the period of due diligence is completed.

“Should this go ahead it would allow the Stewart Milne Group to focus on expanding and developing its successful house building and timber frame operations across the UK, in line with our longer term growth plans.”

Speaking to CN this month, Kier’s group finance director Haydn Mursell admitted the contractor was in the market for acquisitions to boost its national presence.

He said: “We can offer integrated services but it is South-biased so we need a greater national presence, which will at the same time give more skills to the service offering. If we find a deal that gives us all these ticks, then we might look at using some equity deal.”

Among the Scottish group’s recent construction wins is housing contracts with Aberdeen City Council, the Pendland Land Rover dealership in Newbridge, Edinburgh, and the £40m Moray Schools project.

In a statement to CN, a Kier spokesperson said: “Kier Group plc can confirm that early discussions have taken place with the Aberdeen-based Stewart Milne Group, concerning the possible acquisition of some of the activities of their construction division, whose geographical spread, well-established reputation and customer base could provide a good fit with Kier’s own construction business.

“However, at this stage there can be no certainty that a transaction will take place.”

 

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