Carillion last week confirmed the sale of its mechanical and electrical engineering business, Crown House, to Laing O’Rourke for £17.3 million.
CARILLION last week confirmed the sale of its mechanical and electrical engineering business, Crown House, to Laing O'Rourke for £17.3 million.
The sale includes the transfer of all live contracts at Crown House, which has an annual turnover of over £80 million and around 800 employees.The deal also includes a five-year framework agreement under which Crown House will undertake M&E work for Carillion.
Laing O'Rourke said in March that it was in negotiations for the potential acquisition of Crown House 'as part of its policy to offer total capability on major projects' According to the latest Carillion annual report, Crown House made good progress in 2003 and broke even on a substantially reduced turnover. It ended the year trading profitably with a strong order book.
Crown House is one of the top 10 M&E contractors, although its turnover has fallen dramatically from around £220 million and its workforce has shrunk by two-thirds in recent years.
The firm has been seen as a candidate for a sale since 2000 when a string of loss-making contracts, which led to a £25 million loss, were identified. At the time Carillion said growth at Crown House had not been sufficiently controlled.
A restructuring, costing £9 million, involved replacing senior management and focusing on larger contracts for key customers.
The sale of Crown House will involve a net exceptional profit for Carillion of £9.9 million. Carillion chief executive John McDonough said: 'The sale of Crown House is in line with our strategy for sustainable, profitable growth.
'It strengthens the focus on the development of our business services and private finance activities.'
The deal is expected to be completed by the end of June.