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Private equity giant Blackstone takes 50pc stake in Miller Group

A subsidiary of US investment giant Blackstone has taken a 50 per cent share in the family-owned Miller Group through an £160 million five-year credit facility.

GSO Capital is leading the investor group providing the refinancing facility to the Edinburgh house builder, construction and property development and mining firm.

The investor group is also made up of chief executive Keith Miller, group executives, Noble Grossart, Lloyds Banking Group, Royal Bank of Scotland and National Australia Bank.

Miller said the move gives it a significantly strengthened balance sheet with pro forma net assets of about £250m and a platform for growth.

Miller has been battling a debt pile since the housing downturn, reporting a £170m reduction to £500m in its 2010 accounts in March. It said then that its bank facilities were due to expire in spring 2012, with refinancing expected in the coming months.

In March the firm also reported it had cut its pre-tax losses from a 2008 high of £170m to £58m last year, a 20 per cent improvement on 2009’s performance and largely down to lower exceptional costs from reducing staff numbers.

That came after three years of difficult trading which saw turnover tumble from £1.05 billion in 2008 to £738m in 2009 and £666m last year.

Besides the cash injection, the Blackstone investment will also raise questions about potential consolidation.

Private equity group Blackstone bought and built up leisure giant Merlin before selling a chunk of its stake last year. It also bought care home operator Southern Cross, making a number of acquisitions before selling its stake in 2007, four years before the operator collapsed.

Miller group chief executive Keith Miller CBE said: “This equips us with substantial extra muscle to take advantage of the many opportunities offered by the current economic cycle. 

“I am delighted that we have attracted a significant capital investment from one of the world’s leading financial investors.”

Miller Construction chief executive Chris Webster, who joined the contracting arm in September 2010, talked to CN earlier this year about the launch of a wide-ranging strategy to increase turnover by almost 50 per cent.

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