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

MJN bidders hunt new acquisitions

Imtech and Lorne Stewart are hot on the acquisition trail after missing out on the MJN Colston deal, their directors revealed to Construction News this week.

As CN reported earlier this month, Integral acquired the Ministry of Defence’s South-western and Eastern prime contracts from the administrators of M&E contractor MJN Colston after it collapsed in February.

The deal with property maintenance and building services business Integral saves nearly 50 jobs in Bristol and Bury St Edmunds. Administrator Deloitte said 241 jobs were lost in total.

Group chief executive of Imtech UK Jim Steele said his firm generally avoids companies that are in trouble, but they were attracted to MJN Colston’s prime contracts and an opportunity to give Imtech a foothold in the South-west.

“It’s a tough area - you have to be established to work down there,” he said. “Anyone can get work in London - down there, you have to be in the region. We are interested particularly in the South-west, as everywhere else in the UK we have got coverage.”

Mr Steele said Imtech UK, which has made five acquisitions and is backed by a group with a £230m war chest - is also interested in the energy-from-waste sector.

Last year Imtech purchased technical maintenance firm Inviron, taking on 1,100 extra staff, and technical services firm Smith Group, hiring 270 workers.

“We try to buy companies that are strong themselves and have a good management team,” said Mr Steele. He added that some companies would find it tough to make up any shortfalls in contract margins in the current market as there are “no cream-cake jobs”.

Lorne Stewart finance director Puliyelethu Mathew said his firm had also been at the table for the MJN Colston contracts, but that he “always walks away from competition” when it comes to acquisitions.

“We are looking at the acquisitions side of the business,” he told CN. “If it’s the right business, we will buy it”.

This includes looking at the M&E side and facilities maintenance services. Both directors spoke to CN as they posted results for 2011.

Imtech Group revealed a 14 per cent increase in revenue for 2011, from £3.72bn to £4.24bn, with earnings before interest, taxes and amortisation up 11 per cent from £215m to £240m.

The firm said the UK, Ireland and Spain division’s 4.9 per cent margin was below the 5.6 per cent group average due to pressures in Spain and the Inviron takeover.

But it said the takeover has increased its geographic reach and opened the door to the “opportunity-rich airport segment”, including Heathrow, Gatwick and Birmingham.

The company highlighted its mechanical services work on the Olympics. “The projects for the Games, including the sustainable technology in the stadium, the Velodrome and the shopping centre Westfield Stratford City, have been completed on time and within budget.”

Lorne Stewart’s revenue dipped in 2011, down from £173.2m to £162m, but pre-tax profit was up 30 per cent to £7.84m.

Mr Mathew said his company’s stronger performance was down to frameworks, partnerships and being selective about contracts.

The FD said the firm has also been rigorous with clients and its supply chain to ensure they meet credit criteria.

On average, the company says it pays its suppliers within 47 days.

Lorne Stewart is looking to pull in up to £180m of revenue in 2012, but previous plans to double the size of the business have been stifled.

Mr Mathew said: “Because of the market, we are not able to do that - so the only way to do that is to buy a business.”


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.

Related Jobs