£28m deal will result in transfer of the majority of social housing contracts and 2,500 employees

Morgan Sindall has snapped up 80% of Connaught’s social housing contracts in a deal worth £28m.

But 12 “loss making” Connaught contracts have not been bought, including the firm’s £17m deal with Norwich City Council. The Norwich contract was seen by local councillors and rival bidders as very low when it was agreed last December, and a replacement will be “far more expensive” according to Conservative councillor Andrew Wiltshire.

Lovell, Morgan’s social housing division, is expected to gain around £200m of revenue from the purchase.

Morgan Sindall said that 2,500 employees currently working on existing Connaught contracts will be transferred to Lovell.

John Morgan, executive chairman of Morgan Sindall, said that the contracts bought amounted to 80% of Connaught’s total by turnover.

He described the Norwich City Council contract as “heavily loss making” but said that the employees acquired from Connaught had been taken on for the long term and not just for the length of their existing contracts.

“They are very much part of the business,” he said.

In an earlier statement, he said: “This is a step change for Lovell. The acquisition significantly increases the scope and scale of our planned and reactive maintenance activities and further develops our market leading position.

“Our focus now will be to ensure a smooth handover of the contracts and to minimise disruption to essential maintenance services. We look forward to working with our new and existing clients and to provide them with a high level of service, as well as protecting jobs on the contracts we are acquiring.”

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