May Gurney buys Turriff Group for £13.6m

Under the terms of the deal, May Gurney will pay an initial cash sum of up to £8.6m, with a further £5m payable over three years, depending on whether future revenue targets are met and key employees are retained. In addition, May Gurney is taking on the firm’s £9.4m of debt.

May Gurney said the deal brings a number of benefits as it:

• Further strengthens its position in the utilities maintenance market and gains entry to the £2.4bn support services market in Scotland, with opportunities in local government and rail.
• Gains access to the UK’s regulated £1.7 billion gas marketplace which is displaying strong and sustained growth with dependable, long-term income streams.
• Gains Turriff’s acquired order book, which is worth approximately £90m, with available extensions worth up to an additional £70 million. Its key long-term clients include Scotia Gas, Scottish Water and Scottish & Southern Energy.
• The transaction is expected to be earnings accretive in the first full year of acquisition.
• Potential to achieve cost synergies of circa £0.3 million per annum.

Headquartered in Aberdeen, Turriff has more than 550 employees and is one of Scotland’s largest utility infrastructure maintenance companies with market-leading positions in gas, water, electricity and multi-utility services.

For the year to 31 December 2010, based on unaudited management accounts, Turriff had earnings before interest, tax, depreciation and amortisation of £2.5m on revenues of £41m.

Commenting on the deal, May Gurney chief executive Philip Fellowes-Prynne said: “We are delighted to welcome Turriff to the May Gurney group, whose focus on developing long-term client relationships and reputation for assured operational delivery is so aligned to our own. news

“This transaction meets with our strategy of developing wider services with existing clients and increasing our geographical spread. Turriff will provide access to the power and gas maintenance sectors, the Scottish support services market and consolidates our position in water. These are all key growth markets with dependable, sustainable income streams which will provide us with significant opportunities to develop long-term relationships with new clients.”