East Anglia: Mears acquires Morrison Facilities Services business in �24m deal
SUPPORT services group Mears, which specialises in the social housing and care sectors, has acquired Morrison Facilities Services, part of Anglian Water Group subsidiary Morrison plc, in a deal valued at �24million.
Morrison provides repairs and maintenance services to social housing clients across England and Scotland, including East Anglia, and Mears said the deal would reinforce its position as a leading provider in the sector.
“Mears has identified significant strategic and operational synergy benefits from combining with Morrison,” it said.
“Whilst Morrison is currently loss making, Mears has an excellent track record in terms of service delivery and profitability and a strong track record of turning around, integrating and extracting substantial value from acquired businesses.
“Morrison’s contract base fits well with Mears’ structure and service delivery ethos and has a greater focus on higher revenue contracts (those being more than �1million of revenues a month).
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“Increasingly, clients are actively forming broader relationships with fewer, larger operators and the combination of Mears and Morrison strengthens Mears’ depth and breadth of relationships with both smaller and larger clients and will thereby further step-change Mears’ sector leadership position.”
Morrison reported an operating loss, before exceptional items, of �7.6m for the eyar to March 31, on turnover of �290.9m.
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It has since restructured or exited a number of mainly loss making contracts, which Mears said had reduced the pro forma annualised loss to around �5.3m.
Mears added that it had identified a total of �8m of synergies, largely derived from overlapping operations, which would result in one-off costs of around �8m, There was no word in the likely impact on jobs.
David Miles, chief executive of Mears, said: “I am delighted to have completed the acquisition of Morrison at a price which fairly reflects its current profitability. This deal further strengthens Mears’ market leadership and contract profile in social housing.
“Given our strong operational platform and differentiated service delivery ethos, together with our ability to turn around businesses, I am confident that we will deliver significant improvements to Morrison’s contracts, customers, tenants and employees.”