Rotary acquired by Australian m&e company

Rotary, a well-established building services provider in the UK, Republic of Ireland and the Middle East, has been acquired by Australian m&e firm Hastie in a bid to expand the latter’s international operations.

The deal is to be paid for in the form of £70 m cash and 14.7 million Hastie shares.

Established in 1954, Rotary operates mainly in the healthcare, education, industrial, commercial and retail sectors, and employs 2000 staff based in seven countries.

Hastie claims that the firm, which reported revenues of £185 m in 2007, is a strong business fit for its ongoing geographical expansion.

David Harris, managing director and chief executive officer of Hastie, said: “This is a company-transforming transaction for Hastie. The Hastie and Rotary combination creates a major international participant in the building services industry.

“Rotary provides many of the same services to the same customer sectors as Hastie and operates a very similar decentralised business model.

This transaction provides immediate scale in the large UK market, and strengthens our position in the Middle East, where both Hastie and Rotary have growing businesses.”

Hastie’s acquisition of Rotary was announced on the same day that Hastie reported a 45% increase in after-tax profits to A$14.5 m (£6.73 m) for the six months to 31 December 2007.

The firm has a strong forward order book, with more than 90% of forecast revenues to September 2008 underpinned by project contracts.

Harris said: “The rationale for this deal is compelling. While Hastie continues to have good growth prospects, both organically and via acquisition in Australia, the combination with Rotary provides additional opportunities to lever and consolidate relationships with major construction and contracting companies, which we believe is a significant advantage.

The combined group will have annualised revenues in excess of A$1.5 bn, and will be well placed to win and execute large projects.”

Rotary joint-managing directors and majority shareholders Thomas and Francis Jennings are to remain involved. Both will sign two-year executive contracts.