Speedy sells accommodation arm for £34.9m

Speedy Hire has sold its accommodation hire business Speedy Space to Elliott Group for £34.9m, using the cash to pay off its debt.

The subsidiary provides a range of temporary accommodation and storage units, both portable and modular, for hire or sale from 14 transferring leasehold trading depots throughout the UK and as at 30 September 2010, the business had net assets of £52.4m.

As part of the deal Speedy retains the £3.6m working capital in the business at the date of the deal completion.

It has also signed a three-year exclusive deal with Elliott to share services through the respective companies’ client bases.

Steve Corcoran, chief executive of Speedy, said: “I am very pleased to announce the disposal of the loss making Accommodation Hire business and the partnering agreement with Elliott.

“From a customer service perspective, the partnering agreement we have entered into will provide our customers with a comprehensive accommodation hire offering from the UK’s leading businesses in this market. By working as partners with Elliott, our customers can continue to benefit from an integrated service. We look forward to developing this partnership and we see significant opportunities from working together closely in the future.

“Financially, the disposal delivers a pro-forma increase in both operating margin and return on capital. It also delivers a reduction in group borrowings and enables Speedy to focus on investing in our higher margin core operations and to develop further our non-hire services.”